X7 


UC-NRLF 


$B    55    bEfl 


RAUGHON'S 


PRACnCALi 


"Sz "k 


Bookkeeping 


Illustratek 


&   ^^ 


o 

LO 

o 


Digitized  by  the  Internet  Archive 

in  2007  with  funding  from 

Microsoft  Corporation 


http://www.archive.org/details/draughtonspractiOOdraurich 


COPYRIGHTED,  1897-1908, 
By 

JnO.    F.   DRAUaHON. 

All  righte  reserved 


^^^Mi.pjm'^^ 


■*>— i-a 


DRAUGHON'S 

PRACTICAL  BOOKKEEPING 

ELLUSTRATEP: 


FOR 


Self-Instruction 

BY=H07VVE  STTUDY 


AND  FOR  USE  IN 


Literary  Schools  and  Business  Colleges 

BY — 

JNO.  F.  DRAUQHON 

CONSULTING  ACCOUNTANT  and  AUTHOR  OF 


DRAUGHON'S  New  System  of  BOOKKEEPING, 
DOUBLE  ENTRY  MADE  EASY 

DRAUGHON'S  Progressive  Bookkeeping  and 
Legal  Adviser 

DRAUGHON'S  Primary  Bookkeeping 

DRAUGHON'S  Printed  Memorandum  Entries 

DRAUGHON'S  Illustrations  and  General 
Instructions  on  Closing  Entries 

DRAUGHON'S  Home-Study  Course  of  Book- 
keeping 

TEXT -BOOKS  AND  COURSES  OF  INSTRUCTION 
THAT  HELPED  TO  MAKE 

Draughon's    Practical    Business  Colleges 

R/\A\OUS 


^TRirr 


ttoTE.— After  reading  ail  of  this  page,  read  articie  elsewliere  (see  index),  *niie  Course  Outlined." 


PREFACE. 


A  TEXT-BOOK  on  Bookkeeping  that  is  itself  an  instructor  for  home  study, 
one  that  can  be  used  successfully  in  literary  schools  by  teachers  who  have 
not  the  advantage  of  a  good  business  education,  one  that  can  be  used  suc- 
cessfully without  consuming  too  much  of  the  teacher's  valuable  time,  and  yet 
one  which  is  practical,  has  long  been  needed,  but  it  seems  that  such  a  book  has 
never  heretofore  been  issued. 

The  author  feels  that  this  book  will  fill  long-felt  wants,  and  that  it  will  meet 
the  requirements  above  mentioned.  While  it  is  prepared  mostly  for  primary  and 
intermediate  work,  the  author  feels  that  it  may  be  justly  considered  advanced 
Bookkeeping,  if  compared  with  some  publications  on  the  subject  of  Bookkeeping, 
whose  authors  claim  that  their  publications  contain  a  complete  Course  of 
Bookkeeping. 

As  above  stated,  the  author  has  devoted  special  attention  to  primary  and  in- 
termediate work ;  still,  he  believes  that  by  the  use  of  the  peculiarly  practical 
metliods  employed  in  presenting  the  subject-matter,  assisted  by  accurate  illustra- 
tions, diagrams,  etc.,  the  more  complicated  part  of  this  book — that  part  pertaining 
to  advanced  Bookkeeping — is  presented  in  such  a  manner  that  a  person  can,  even 
without  experience,  grasp  the  ideas  with  much  less  trouble  than  the  simplest  part 
of  the  primary  work  of  similar  publications. 

While  he  believes  that  any  person  who  masters  tlie  contents  of  this  book  will 
be  better  prepared  to  keep  books  than  many  full  graduates  of  some  of  our  so-called 
•'business  colleges,"  he  has  prepared  other  books  for  those  who  desire  to  reach  the 
top  of  the  profession. 

One  of  the  faults  common  to  other  publications  on  Bookkeeping  that  have 
come  under  the  author's  observation — and  he  has  had  the  pleasure  of  examining 
dozens  of  such  publications — is  that  in  that  which  they  claim  to  be  i)rimary  work 
they  hardly  touch  upon  the  real  subject  of  Bookkeeping;  hence,  many  students 
have  spent  months  studying  some  of  these  books,  being  under  the  impression  that 
they  were  making  good  headway  in  acquiring  knowledge  of  Bookkeeping,  when 
they  had  made  hardly  a  start.  Nevertheless,  their  efforts  and  the  results  obtained 
were,  in  some  cases,  entirely  satisfactory  to  their  teachers,  because  the  teachers 
labored  under  the  same  difficulty  that  the  students  had  experienced,  not  knowing 
where  the  trouble  was.     - 

While  the  size  of  the  type  used  in  this  book  is  not  objectionably  small,  it  is 
small  enough,  assisted  by  the  arrang3ment  of  the  subject-matter,  to  enable  the 
author  to  get  on  the  number  of  pages  as  much  matter  as  is  usually  put  in  books 
double  the  size  of  this  one.  Author. 


INDEX,  JNO.  F.  DRAUQHON  SET. 


A 
B 

Bills  Beceivable 3 

Bills   Payable 3 

Boyd  Bros.  <fc  Smith 4 

O 

Clay  &  Bass 8 

Cook,W.  B 4 

D 

Draughon,  Jno.  F.  (stock) 2 

Bortch,    Dr : 8 

E 

Expense , . .  2 

F 


Freight 


G 


Grant  &  Grant ,  .3 

H 

Houston,  Meeks  &  Co 8 

I 

Interest  and   Discount ; 2 

J 
L 


M 

Merchandise •. 2 

Matthews  &  Hood 4 

N 
O 

Orr,  Jackson  &  Co 3 

P 

Pope,  A.  B 3 

Profit  and  Loss 2 

O 

R 
S 

Sulphur  Lumber  Co..t 4 

Stephens,  J.  H -1 

T 
U 
V 
W 

AVickham  &  Pendleton 3 

X 
Y 
Z 


OUasfiger,  JNO.  F.  DRAUGHON  SET. 


..Dr.  - ; 


JNO.  F.  BRAUGHON'S  STOCK 


Cr. 


July 


To  Cash. 


t 

7 

3.737 

88 

19... 
Jan. 
July 

I 

3.737 

By  C; 


Cash 

and  L... 


1 

2,000 
1.737 

3,737 

00 


Boughe. 

MERCHANDISE. 

y 

y^  Sold. 

19... 
Jan. 

31 
8 
28 
30 
10 
30 
1 

To  Sundries 

8 
6 
8 
8 
6 
8 
L.P.2 

/ 

600 

3 

350 

360 

4 

L175_ 

00 
00 
00 
00 
00 

no 

19.., 

Jan. 
Feb. 

-J 

Apr. 
May 
\^ 
July 

1 

8 
28 

1 
6 
10 
12 
31 

1 

10 
30 

t 
15 

30 
31 

I 
10 

By  Cash. 

6 
6 
9 
6 
6 
6 
9 
6 
6 
6 
6 
6 
9 
6 
6 
6 
9 
7 
7 
7 

10 
7 
7 
7 

10 

26 

200 

383 

50 

10 

20 

.    141 

200 

20 

10 

25 

330 

188 

200 

336 

26 

181 

220 

260. 

22 

224 

10 

260 

30 

111 

00 

Feb. 

"  Cash 

00 

"  Sundries .". 

"   T.  S 

70 

Mar. 

(i        «i 

"  Cash 

00 

Apr. 

"  Cash. 

<(      « . 

oo 

"  Sundries- 

(«      (« 

00 

July 

"  P.  and  L.* 

(•red  Ink.)     / 

/( 

To  inventory  ....V 

(■1.992 

il 

"    T.  S 

50 
00 
UO 

00 

^ 

««       »» 

i«      *•« 

00 

(«       tt 

00 

*«    T    S 

00 

' 

*•  Cash 

00 

00 
00 

"    T.  S 

90 

"  Cash 

00 

00 

<•       (t 

00 

"    T.  S. 

10 

"'  Cash 

00 

(t      <i 

00 

IC               t( 

00 

"  T.  s ;;.;;.... 

'^. 

HL  Inventory* 

><<ed  Ink.).     > 

By  Cash^,,l??!>k^ 

1.000 

00) 

4.484 

45 

4,484 

45 

19     . 

July 

1 

>1.000 

00 

19     . 

July 

1 

7 

1,000 

00 

k 

Vt" 

K 

1 

v 

— ^^ — 

\ 

' 

PROFIT  AND  LOSS 


19... 

July 


To  Expense... 
"  Freight.... 

"  Stock* 

(*red  ink.) 


1,996      13 


I     By   Merchandise  l,p.2     1,992     46 
Int.  and  Pis.  I..P.2 


1,996      13 


EXPENSE. 


19... 

Jon. 


S-eb. 
Har. 

Apr. 

May 

Jane 


To  Cash 


19  . 

6 
6 

25 
2 

00 
00 

July 

\ 

6 

I 

00 

6 

25 

00 

6 

25 

00 

6 

2 

26 

6 

25 

00 

6 

3 

00 

7 

2n 

00 

7 

6 

00 

7 

26 

00 

7 

3 

00 
26 

' 

167 

By\andL.* J i..v.2    (l67    26) 


(\ed  ink 


167      25 


FREIGHT.                       y                             \ 

19... 
Jan. 

14 

8 

6 

30 

30 

To  Cash 

6 
6 
6 
6 

7 

20 
15 
15 
20 
21 

00 
00 
00 
00 

19.. 
July 

X 

By  P.  andL.*. . 

(♦red  Inky;^^ 

L.P.2 

^ 

fe) 

Feb. 

ZZJ 

Mar. 

4<                   «( 

Apr. 

«                   It 

Mky 

It                   «• 

91 

91 

QQ 

V 

1 

INTEREST  AND  DISCOUNT 

19... 
Apr. 

1 
1 

ToM.  A  H 

8 
L.P.2 

H 

w 

1    19... 
'  Apr. 

12 

By  O.,  J.  &  Co 

8 

4 
4 

00 

July 

"  P.  andL.* 

'•red  Ink.) 

4 

00 

00 

Ledger,  JNO.  F.  DRAUCHON  SET. 


Dr. 


BILLS  RECEIVABLE. 


Cr. 


19 

Ai.r. 

10 

To  W.  B.  C 

i 

8 

21 

00 

19 

Mny 

10 

By  Cash  (W.  B.C.)... 

t 

21 

00 

BILLS  PAYABLE. 

19 

Mav 

10 

To  Cash  (O.,  J.  &  Co.) 

7 

1 

100 

00 

19 

Anr. 

30 

By  O.,  J.  &  Co 

8 

100 

00 

1 

HOUSTON, 

MEEKS  &  CO., 

ST. 

LOUIS,  MO. 

19 

Feb. 

1 

1 
10 

1 

To  Cash.. 

6 

6 
6 

7 

m 

100 

CO 

1,075 

00 
0) 
00 
00 

19 

Jan. 
Feb. 
Mar. 
Apr. 

1 
2 
2 
2 

Bv  Mdse. 

8 
8 
8 
8 

200 

100 

60 

1,075 

00 

Mar. 

ii         a 

00 

Apr. 

OQ 
00 

July 

hi         (( 

1,4:55 

00 

1.435 

00 

WICKHAM  &  PENDLETON, 

ST 

.  LOUIS,  MO, 

19 

Feb. 

1 

1 

10 

To  Cash 

6 
6 
6 

300 
200 
100 

00 
00 
00 

19 

Jan. 
F.-b. 
Mar. 

6 
6 
2 

By  Mdse 

8 
8 

8 

300 
200 

ito 

00 

Mar. 

u         u 

00 

Apr. 

It             n         _ 

't         n 

00 

COO 

00 

1,00 

00 

ORR,  JACKSON  &  CO 

„  NASHVILLE,  TENN. 

19 

Feb. 

1 

1 

10 

30 

To  Cash.„. 

6 
6 
6 

8 
8 

100 

50 

196 

4 

100 

00 
00 
00 
00 
00 

19 

Jan. 
Feb. 
Mar. 
Apr, 

3 
6 

ByMdse.,..» 

8 
8 
8 
8 

100 

50 

200 

100 

00 

Mar. 
Apr. 

"•    Int.  and  Dis 

00 
00 
00 

"    Bills  Payable 

450 

00 

450 

00 

1 

1 

1 

GRANT  &  GRANT,  GUTHRIE,  KY. 


19 

14 
28 
10 
15 
1 

To  Mdse 

9 
9 
9 
10 
10 

23 
60 
25 
5 
50 

70 
00 
50 
20 
00 

19 

Feb. 
Mar. 
Ai)r, 
June 
July 

1 
10 

1 
1 
1 

By  Cash 

6 
6 
6 

7 
7 

23 
60 
25 
5 
50 

70 

Feb. 

11,       it 

00 

Mar. 
Mav 

i4              il 

60 
20 

June 

u         u 

00 

161 

40 

164 

40 

1 

A,  B.  POPE,  167  WOODLAND  STREET,  CITY. 


19 

Jan. 
Mai\ 
May 


31 


To  Mdse. 


19 

9 

360 

00 

Feb. 

2 

9 

80 

O:) 

Apr. 

1 

10 

16 

40 

June 

1 

456 

40 

By  Cash.., 


456 


40 


CLAY  &  BASS.        (You  should  give  P.  O.  here.) 

19 

Feb. 

15 

To  Mdse 

9 

60 

50 

19 

Mar. 

10 

By  Cash 

6 

60 

50 

~~ 

DR.  DORTCH. 

19 

Feb. 

15 

To  Mdse 

3 

21 

00 

19 

Mar. 

10 

By  Cash 

_6^ 

21 

00 

~~ 

f  Column  for  page  of  book  posted  from.    Star  (*)  and  black-face  type  on  pages  2,  6,  and  12  indicate  that 
red  ink  is  to  be  used  for  full  line. 


Ledger,  JNO.  F.  DRAUCHON  SET. 


Dh. 


MATTHEWS  &  HOOD. 


Ck. 


19 

Mar. 
June 


To  Mrlse. 


f 

19 

9 

32 

50 

Apr. 

1 

10 

61 

25 

July 

1 

93 

75 

By  Cash 

"  Int.  and  Dis. 
"  Cash 


61 


BOYD  BROS.  &  SMITH. 

19 

Apr. 

1 

ToMdse 

9 

60 

00 

19 

Jn1v 

1 

By  Cash 

7 

60 

00 

W.  B.  COOK. 

Apr. 
May 


To  Mdse 
(.      lb 


9 
10 
10 

21 
101 
101 

00 
50 
00 

19 

Apr. 
June 
July 

10 

1 
1 

223 

50 

B7  Bills  Re( 
"   Casli 


21 
101 
101 


228 


SULPHUR  LUMBER  COMPANY. 

19 

Apr. 

30 

ToMdse 

9 

100 

90 

19 

July 

1 

By  Cash 

7 

100 

90 

J.  H.  STEPHENS,  KENNEDY,  KY. 

10 

Mtr. 

31 

ToMdse 

9 

50 

00 

19 

Apr. 

1 

By  Cash 

6 

50 

00 

1 

HOW  AND  WHY  WE  TAKE  A  TRIAL  BALANCE. 


To  take  a  Trial  Balance  is  to  see  if  the 
Ledger  is  on  balance. 

First,  go  to  the  left-hand  side,  the  receiv- 
ing side,  of  your  Cash  Book,  and  foot  up  the 
column.  Then  foot  up  the  column  on  the 
right-hand  side  of  your  Cash  Book,  which 
represents  the  Cash  you  paid  out.  Subtract 
this  from  the  amount  of  your  left-hand  col- 
umn, which  column  represents  the  Cash  you 
receive.  The  difference  between  the  two  col- 
umns will  represent  the  amount  of  Cash  on 
hand.  Enter  the  difference  on  the  left-hand 
side,  the  debit  side,  of  your  Trial  Balance. 
(See  January  Trial  Balance,  page  5.)  Sec- 
ond, foot  up  the  accounts  in  the  Ledger,  debit 
and  credit  sides,  in  small  pencil  figures,  using 
a  sharp-pointed  pencil.  Place  the  footings 
close  to  and  directly  under  the  respective  ac- 
counts. After  footing  up  each  account,  write 
in  the  Trial  Balance  Book  the  name  of  each 
account  in  the  Ledger,  except  those  that  bal- 
ance— that  is,  when  both  debit  and  credit 
sides  agree.  Take  the  difference  between  the 
debit  and  credit  of  each  account.  If  the  dif- 
ference shows  a  debit,  place  the  difference  in 
the  debit  column  on  your  Trial  Balance  op- 
posite the  names  of  the  respective  accounts 
you  had  previously  written  in  your  Trial  Bal- 
ance Book.  (See  Trial  Balance,  page  5,  for 
form.)        If     the     difference     in     these     ac- 


counts shows  a  credit,  then  you  would  write 
the  difference  in  the  credit  column  of  your 
Trial  Balance.  Proceed  this  way  through 
your  Ledger.  When  through,  add  your  total 
debits,  left-hand  side  of  your  Trial  Balance ; 
then  add  your  total  credits,  right-hand  side 
of  your  Trial  Balance.  (See  footings  of  Jan- 
uary Trial  Balance,  page  5.)  Your  footings 
should  agree.  Should  they  not  agree,  then 
you  know  that  you  have  an  error  in  some 
part  of  your  work. 

A  Trial  Balance  does  not  absolutely  prove 
that  your  work  is  correct.  It  proves  only 
that  each  debit  has  had  a  corresponding 
credit,  and  each  credit  has  had  a  correspond- 
ing debit.  The  Trial  Balance  does  not  de- 
tect such  errors  as  posting  to  the  wrong  ac- 
count. You  might  intend  to  credit  Jones  with 
$50,  but  you  might,  by  mistake,  credit  Smith 
with  this  amount.  This  Would  not  throw 
you  off  in  your  Trial  Balance  at  all.  Then 
there  is  another  mistake  you  might  make 
which  would  not  affect  your  Trial  Balance. 
For  instance,  you  might,  in  adding  a  credit 
column,  make  an  error  of  $10.  You  might, 
also,  in  adding  your  debit  column,  make  an 
error  of  $10.  Hence,  you  see,  one  would 
offset  the  other.  In  taking  Trial  Balance 
always  give  Ledger  page  on  Trial  Balance 
preceding  each  account. 


TRIAL  BALANCE 
Jno.  F.  Draughon  Set,  January  31, 19 


Dk. 

Ck. 

Cash  (get  cash  from  Casli  Book) 

2,177 

2S 

20 

23 

3G0 

00 
00 

00 
70 
00 

Jno.  F.  Dranghon's  Stock 

2,000     00 

8      70 

200     00 

300      00 

Expense 

MdsG.... 

Freight 

Houston,  M.  &  Co 

Wickham  &  P.. 

Grant  &  Gri*nt 

A.  B.  Poi>e. 

Orr,  J.  &  Co 

100      00 

2.60 -i 

70 

2.608      70 

TRIAL  BALANCE,  JNO.  F.  DRAUGHON  SET,  MARCH  31,  19. 


TRIAL  BALANCE,  JNO.  F.  DRAUGHON  SET,  MAY  31,  19.. 


Cash 

Expense 

Freight 

Grant  &  Grant 

A.  B.  Pope 

W.B.Cook , 

Boyd  Bros.  &  Smi  h, 
Sulphur  Lumber  Co. 


3,044 

63 

139 

25 

91 

00 

6 

20 

16 

40 

202 

50 

60 

00 

100 

90 

3,659 

88 

Jno.  F.  Draughon's  Stock 

Mflse 

Interest  and  Discount 

H.,  M.  &  Co 


TRIAL  BALANCE,  JNO. 

F.  DRAUGHON  SET,  FEBRUARY  28,  19. 

Cash 

1,997 
122 
53 
35 
60 
21 
60 

70 
80 
00 
CO 
00 
CO 
50 

Jno.  F.  Draughon's  Stock 

2,000 

100 

200 

50 

(K,- 

Mdse 

II.,  M.  &  Co 

00 

W.  &  P 

00 

Frcisrlit 

Orr,  J.  &  Co 

00 

Gi'ant  &  (jrunt 

• 

Dr.  Dor  tell 

Clay  &  Bass 

2,3.-.0 

00 

2,350 

00 

■ 

Cash 

2,331 
80 
50 
25 
80 
32 
50 

2,6r)0 

0.') 
.25 
00 
5-) 
00 
50 
00 
20 

Jno.  F.  Draughon's  Stock 

2,000 

290 

60 

100 

200 

00 

Expense 

Mdse 

20 

H.,  M.  &  Co...  

00 
00 

Grant  &  Grant 

W.  &  P 

A.  B.  Pope 

Orr,  J.  &  Co 

00 

Matthews  &  Hood                   

J.  H.  Stephens 

2,650 

20 

TRIAL  BALANCE,  JNO.  F.  DRAUGHON  SET,  APRIL  30,  19.... 

Cash 

2,673 
144 
108 
70 
21 
60 
100 

63 

90 
25 
00 
00 
00 
90 

2,000 

3 

100 

1,075 

00 
68 
00 

Mdse 

Interest  and  Discount 

Expense 

Bills  Payable 

Freiglit 

H.,  M.  &  Co 

00 

Bills  Ileceivablo 

Bovd  IJros.  &  Smith  ..                      

3,178 

68 

3.178     68 

TRIAL  BALANCE,  JNO.  F.  DRAUGHON  SET,  JUNE  30,  19.... 


Cash 

3,439 
107 
91 
50 
101 
60 
100 
61 
4,071 

73 
25 
00 
OO 
00 
00 
90 
25 
13 

fTno.  T*^-  T)i*aTiffhon'ft  fttn^t 

2,000 

992 

3 

1,076 

00 
45 
68 
00 

Mdse 

Freiglit 

Gi'ant  &  (iirant 

H.,  M.  «&  Co 

W.  B.  Cook 

Bov<iBios  &  Smith  ....                        ..  .. 

Matthews  &  Hood 

4.071 

13 

Note.— In  business,  number  of  ledger  page  should  appear  on  trial  balance  at  left  of  each  account,  as 
per  page  39. 

6 


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Journal,  JNO.  F.  DRAUCHON  SET. 


JANUARY,  19.... 


/5 

EXPLANATORV     CoLUMN. 

i' 

Dr. 

Cr. 

1 

6 

Mdse To: 

Houston,  Mecks  &  Ct 

Wickhani  &  Penaielou... 
Orr,  Jackson  &  Co 

Sundries 

2 
3 
3 
3 

603 

00 

200 
800 
100 

9. 

Their  bill  datod  23d  iilt 

00 

8 

'•         '^        "      6th  inst 

00 

4 

"         '•        "      6th    "    .  .. 

f*0 

60) 

00 

600 

00 

FEBRUARY,  19. 


5 

8 

M<lse To: 

Houston,  Meei.8  &  Co 

Wickham  &  Pen-  leton... 
Orr,  Jackson  &  Co 

SuTnlries. .                        .... 

2 
3 
3 
3 

SoO 

00 

100 

200 
50 

6 

Their  bill  dated  2(1  in~t 

0) 

7 

•'         "        <>'      6th  "•               

00 

8 

"         "       "      8t.i  "  

00 

3-.0 

00 

350 

00 

1         1 

APRIL,  19.... 


MARCH,  19  ... 

9 

81 

M  se T.»: 

Houston,  Me*  ks  &  Co 

Wickh.ini  &  Peidlftoii... 
Orr,  Jackson  &  Co 

2 
8 
3 
3 

'        363 

00 

60 
100 
200 

10 

Their  bill  dated  2d  inst 

00 

11 

•••       '*      2d    "    

1  > 

"         K        "      3d    "                    

00 

1        360 

00 

360 

00 

1 

13 

1 
10 
10 
80 

80 

Int.  and  Dis To: 

Matthews  &  Hoo.  1 

I'per  cent  discount  on  $82  50. 

4 
2 

8 
2 

3 
4 

2 
8 
3 

8 

3 

4 

21 

1,175 

100 

82 
00 
00 
00 

00 

,     4 

21 

1.075 
100 

100 

32 
00 

14 

Orr,  Jackcon  &  Co  ...  To: 
Interest  and  discount 

r,ills  Receivable To: 

W.  B.  Cook 

15 

(Received  his  30-ilay  note  on  account)... 
Sun<1ries 

00 

16 

Mdse To: 

Houston,  Mecks  &  Co 

Orr,  Jackson  &  Co 

Their  bill  dated  2d  inst 

00 

"■         '"        "      6th  "     

00 

17 

Oir,  Jackson  &  Co To: 

Bills  payable 

(Gave  them  our  30-day  note  on  account) 

00 

1,800 

33 

1-300 

32 

Note. — As  st  ited  el>ewhcre,  we  have  numbered  each  entry  in  order  to  assist  tiie  student  in  trac'n^  the 
entries  from  Memoran<'unj  Book  to  Cash  Book,  J.>urnal,  and  Sales  Book.  The  student  should  spend  one 
or  two  days  in  tracinj?  entries  in  tlie  JNO.  F.  DUAUGHON  SET  before  he  attempts  to  do  any  writing, 
carefully  studying  the  form  for  making  tlie  entries,  explanations,  etc. 


EXPLANATION. 

In  order  to  make  the  student's  work  as  practical  as  possible,  it  is  best  that  he  do  his 
work  dating  it  the  year  in  which  the  work  is  being  done,  and  for  this  reason  where  the 
year  should  be,  for  instance,  1908  or  1910  or  1915,  as  the  case  may  be,  we  simply  insert 
19 5  but  the  student  should  insert  on  his  own  books  the  current  year. 

8 


Sales  Book,  JNO.  F.  DRAUCHON  SET. 


JANUARY,  19. 


1 

3 
3 
2 

[  Day  of  the  Month.] 

[14  J 
Grant  &  Grant,  Guthrie,  Ky.— 
1  bid.  G.  sugar,  300  lbs,,  @  7\4c 

22 

1 

60 
300 

3S3 

30 
20 

00 
00 

70 

23 

360 

70 

3M.  W.  P.  Caps®  60c 

2 

[31 J 
A.  "B.  Popo,  167  Woodland  Stree'  — 
10  l)bls.  flour.  3  X,  (?ft  ii^G.OO 

00 

100  bbls.  meal,®  $3.00 

3 

Mdse.  Cr. : 
Total  sales  this  month  (Cr.  mdse.  with  this) 

3S3 

70 

4 

3 
3 

3 

2 

[15] 
Clav  &  Bass,  Paris,  Tenn.— 

2  lbs.  che  >e,  (a)  i5o 

10  bbls.  flour,  ©.i  6.00 

60 

3 
18 

60 
141 

50 
00 

00 
(.0 

00 
50 

60 
21 
60 

50 

5 

[16] 
Dr.  T)ortoh,  Hill 'born,  Tenn.— 
1  bam,  20  1  is.,  @  15  • 

00 

6  bb.s.  m  a,@  $3.00... 

6 

[20] 
Gr-nt  &  Grant.  Gut^^rie,  Ky.- 

10  bbls.  flour,  @  .^6.00 .>. 

00 

Mdse.    Cr.  it  Avith  total  time  sales  this  month 

7 

141 

r»n 

FEBRUARY,  19. 

[151 
[16] 
[20] 
8  this  month 

MARCH,  19. 

6] 
10] 

31] 
ixas — 

APRIL,  19. 

[1] 

Boyd  Bros.  &  Smith,  Citv— 
20  bbls.  meal,  (g)  tiM 

[10] 
W.  B.  Cook,  Dallas,  Texas— 

6  doz.  brooms,  No.  2,  @  $1.50 

6    "  "        No.  l,@$i.00 

[30] 
Sninhur  Lumber  Co.,  Sulnhur,  Texas— 

20  l)l)ls.  flour,  XXX,  @  $U)0 

1  caae  tomatoes,  1  lb 

Mdse.  Cr 

______  _ 


s 

3 

3 

4 
4 

2 

[6] 
X.  B.Pope 

50 
30 

22 
3 

50 

30 
2 

00 
00 

50 
00 

00 

00 
50 
00 

80 

25 

50 
32 

00 

10  bbls.  flour,  3  X.  @  $5.00 

10  bbls.  meal,@  $3.00 

9 

[10] 
Grant  &  Grant— 
1  bbl.  G.  sugar,  300  lbs,  @7^c 

50 

1  bbl.  mi'al       

10 

[31] 
J.  H.  Stephens,  Kennedv,  Ky. — 
10  bbls  flour,  3  X,  ®  fS.OO 

00 

11 

Mttthew-  &  Hof>d.  Que-'U  City,  Texas— 
10  bbls.  meal,  @  $3.00 

50 

3^  C.  tomatoes,  3  lbs.,  (S,  Si. 00 

2  0.  lomat  es,  2  lbs.  (5)  $1  00.                  

Mdse.  Cr 

12 

188 

00 

188 

00 



13 

4 

14 

4 

15 

4 

iL 

2 

60 


100 


00 


Sales  Book,  JNO.  F.  DRAUGHON  SET. 


MAY,  19. 


o  c 

17 

i 

18 

4 

19 

3 

20 

3 

21 

2 

[IJ 

W.  B.  Cook— 

20  bbls.  flour,  XXX,  @  $5.00 

1  doz.  brooms 

[]0] 
W.  B.  Cook— 
20  bbls.  flour,  XXX,  @  |5.00 

1  case  blackberries 

[15] 
Grant  &  Grant— 
4  cases  gooseberries,  @  80c 

2  "     strawberries,  @  $1.00 

[30] 
A.  B.  Pope— 

4  cases  salmon,®  $3.50 

2     "     oysters,  1  lb.,  @  «1.20 

Mdse.  Cr.. 

JUNE,  19.... 

[1] 

Grant  &  Grant — 
10  bbls.  flour,  XXX,  @  «5.00 

[30] 
Matthews  &  Hood— 

20  bbls.  meal,®  $3.00 

1  case  corn,  No.  1 

Mdse.  Cr 


100 

1 


100 

1 


224 


101 


101 


50 


00 


20 


22 


50 

60 

1 

00 

00 
25 

50 
01 

111 

25 

Jll 

00 


Note. — See  explanation  on  page  8  as  to  why  we  number  each  eDti}-. 

N.  B.— It  is  not  objectionable  to  reverse  extension  in  "Dr."  and  "Cr."  columns  of  Sales  Book.  Fo/ 
instance,  take  W.  B.  Cook,  May  1st,  vou  couM  extend  to  right-hand  column  $100.00  and  51.50  ami  place 
total  8101.50  in  left-hantl  column  on  line  with  W.  B.  Cook's  name. 

A  Few  Rules  for  Detecting    Errors  in  Trial  Balance. 

1st.  Go  over  the  addition  of  the  Trial  Balance,  assuring  yourself  that  it  is  correct. 

2d.  Ascertain  the  exact  difference  and  look  cautiously  through  the  books  of  original 
entry  for  all  amounts  similar  to  the  amount  of  error,  seeing  that  they  have  been  posted 
on  both  Dr.  and  Cr.  sides  of  Ledger. 

3d.  Examine  the  addition  of  the  outside  columns  in  Sales  Book,  satisfying  yourself 
that  the  footing  has  been  posted  to  the  Gr.  side  of  IVlerchanc^ise  account. 

4th.  Examine  the  Journal  entries  to  see  that  each  entry  balances. 

5th.  See  whether  you  have  transferred  the  amounts  correctly  from  Ledger  to  Trial 
Balance,  going  carefully  over  the  footing  of  each  account  in  Ledger  and  taking  the 
difference. 

6th.  Check  the  posting — that  is,  see  whether  all  the  amounts  have  been  transferred 
correctly  from  each  of  the  books  of  original  entry  to  the  Ledger. 

7th.  Go  over  the  Ledger  accounts  again,  and  see  that  each  amount,  on  both  Dr. 
and  Cr.  sides,  has  been  checked.  If  any  have  not  been  checked,  they  have  been  posted 
erroneously,  and  will  doubtless  prove  to  be  the  amount  of  difference  in  your  Trial 
Balance. 

8th.  If  the  error  is  $18,  $27,  $36,  or  any  other  amount  divisible  by  9  without  a 

10 


remainder,  then  it  is  possible  that  it  is  by  reason  of  a  transposition.  Say  you  have 
posted  $63  as  $36,  the  difference  would  be  $27. 

9th.  Divide  the  difference  by  2,  then  go  over  the  books  of  original  entry  for  the 
amount,  and  see  if  you  have  not  posted  to  wrong  side  of  Ledger  account. 

10th.  If  the  error  is  not  found  after  going  over  the  9th  rule,  begin  with  rule  No. 
1,  and  go  over  them  again  and  again  until  the  error  is  found. 


COMMERCIAL  PAPER=Use  Current  Date. 

(See  page  67  for  forms  of  notes,  duebills,  etc.) 


After  the  student  has  completed  the  Jno.  F. 
Draughon  Set,  he  should  draw  up  the  following 
papers,  number  them,  and  submit  them  for  inspec- 
tion. To  schools  that  adopt  this  book,  Draughon's 
Practical  Business  College  Co.  will,  ui)on  request, 
send  these  papers  correctly  drawn  up,  to  be  used  as 
a  guide  by  the  teachers  of  such  schools,  in  case  they 
are  not  familiar  with  the  forms  of  notes,  duebills, 
etc. 

The  student  is  supposed  to  be  working  for  tlie 
firm  of  Jno.  Doe  &  Co.,  Nashville,  Tenn. 

(1)  Draw  a  three-day  siglit  draft  for  your  firm, 
Jno.  Doe  &  Co.,  Nashville,  Tenn  ,  the  firm  for  whom 
you  are  supposed  to  be  working,  on  A.  C.  Jones, 
Atlagta,  Ga.,  in  favor  of  the  Bank  of  Atlanta; 
amount,  $74.25  with  exchange. 

(2)  Draw  for  your  firm,  Jno.  Doe  &  Co.,  Nashville, 
Tenn.,  a  thirty-day  time  draft  on  A.  C.  Jones,  Dal- 
las, Tex.,  in  favor  of  Jno.  Doe  &  Co.,  Nashville, 
Tenn.— amount,  $136.75 — and  have  A.  C.  Jones  ac- 
cept this  draft  payable  at  Gaston  National  Bank, 
Dallas,  Tex. 

(3)  Suppose  your  firm,  Jno.  Doe  &  Co.,  Nashville, 
Tenn.,  owe  Houston,  Meeks  &  Co.,  St.  Louis,  Mo., 
$99.82.  The  Sulphur  Lumber  Co.,  Sulphur,  Tex., 
owes  your  firm,  Jno.  Doe  &  Co.,  $99.82.  Your  firm, 
Jno.  Doe  &  Co.,  draw  on  Sulphur  Lumber  Co.,  in 
favor  of  Houston,  Meeks  &  Co.,  a  three-day  sight 
draft,  $99.82,  inclosing  same  with  letter  from  Jno. 
Doe  &  Co.  to  Houston,  Meeks  &  Co.,  St.  Louis,  Mo. 
Write  the  letter  and  submit  with  draft  to  your 
teacher  for  approval. 

(4)  Have  J.  S.  Brown,  Winchester,  Tenn.,  give 
Jno.  Doe  &  Co.,  Nashville,  Tenn.,  a  thirty-day  note 
—amount,  $10.20— payable  at  First  National  Bank, 
Nashville,  Tenn.,  with  interest  at  6%  from  date. 
You  draw  the  paper  for  Brown. 

(5)  Have  Ed  Lambert  and  Henry  Little,  Texai- 
kana,  Tex.,  give  Jno.  Doe  &  Co.,  Nashville,  Tenn., 
a  joint  and  several  note  for  one  month;  amount, 
$150.75.  You  draw  the  paper  for  Lambert,  the  same 
as  if  you  were  his  bookkeeper. 

(6)  Have  J.  H.  Draughon  give  Jno.  Doe  &  Co. 
a  four-month  note;  amount,  $500.00. 

(7)  Have  Sulphur  Lumber  Co.,  Sulphur,  Tex.,  give 
Jno.  Doe  &  Co.  a  ono-day  note  payable  at  Jno.  Doe 
&  Co.'s  ofiice;  amount,  $200.50,  to  be  credited  on  ac- 
count. Inclose  same  with  a  letter  supposed  to  be 
written  by  Sulphur  Lumber  Co.  to  Jno.  Doe  &  Co. 


(8)  Transfer  the  above  note  to  Houston,  Meeks  & 
Co.  "  without  recourse,"  Avhich  means  that  you  will 
not  be  responsible  for  the  collection  of  the  note. 

(9)  Suppose  that  your  firm,  Jno.  Doe  &  Co.,  owe 
Grover  Cleveland,  Princeton,  N,  J.,  $120.00,  and  you 
give  him  a  three-day  sight  draft  on  T.Roosevelt,  Big 
Stick,  Va.,  who  owes  you,  Jno.  Doe  &  Co.  You 
draw  the  paper  and  inclose  same  with  a  letter  to 
Cleveland,  requesting  him  to  credit  your  account. 

(10)  Send  Simmons  Hardware  Co.,  St.  Louis,  Mo., 
Jno.  Doe  &  Co.'s  thirty-day  acceptance,  payable  at 
Draughon's  Practical  Business  College  Bank,  St. 
Louis,  Mo. ;  amount,  8130.65,  to  be  applied  on  account. 
Write  Simmons  Hardware  Co.  a  letter  inclosing  the 
acceptance.  (See  comment,  page  26,  "A  Note  or  an 
Acceptance.") 

(11)  Have  R.  0.  Jones,  Hope,  Ark.,  send  you 
his  sixty-day  acceptance,  favor  Jno.  Doe  &  Co., 
payable  at  Jno.  Doe  &  Co.'s  office;  amount,  $679.42. 
You  draw  the  draft  as  if  you  were  representing  R. 
C.  Jones. 

(12)  Transfer  the  above  Jones's  acceptance  to  the 
First  National  Bank,  Nashville,  Tenn. 

(13)  Receipt  J.  F.  Smith  for  $25.00  on  account. 
(USE  PLAIN  WHITE  PAPER  TO  DRAW  RE- 
CEIPTS. In  business  you  should  use  printed  form 
for  writing  receipts.) 

(14)  Receipt  W.  H.  Cullom,  $75.00  in  full  of  account. 

(15)  Give  R.  D.  James  order  on  W.  H.  Cullom  for 
Mdse.— amount  $20.00;  also  order  for  cash,  $5.00. 

(16)  Give  your  check  to  J.  S.  Brown  &  Co.,  New 
York,  on  Draughon's  Practical  Business  College 
Bank,  Washington,  D.  C;  amount,  $82.50. 

NOTE.— Always  make  checks  payable  "To  Or- 
der" unless  for  some  special  reason  you  do  not 
wish  to  do  so. 

(17)  Draw  a  thirty-day  .note  for  Smith  &  Co.  in 
favor  of  Jno.  Doe  &  Co.  for  $25.00,  and  transfer  it  to 
Jones  &  Co.  "  without  recourse." 

(18)  Have  Jno.  Doo  &  Co.,  Nashville,  Tenn.,  give 
Jones  &  Co.,  Memphis,  Tenn.,  duebills,  $25.00  each, 
as  follows:  One  a  thirty-day  time  duebill,  payable 
in  cash,  one  for  cash  on  demand,  and  one  for  mer- 
chandise on  demand. 

N.  B.— If  ten  cents  In  stamps  is  sent  to 
Draughon's  Practical  Business  College  Company, 
Nashville,  Tenn.,  additional  blank  notes,  drafts, 
and  checks  (ten  of  each)  will  be  mailed  to  the 
sender. 


Jp^'Student  must  arrange  his  papers  acoording  to  numbers  before  submitting 
fhem  for  inspection.  '^^ 


SKELETON  LEDGER. 


DR. 

JNO.  F.  DRAUGHON  STOCK.                                                        Cr, 

Feb.    28 

To  Balance* 

...,....., 2.137.25 

Jan.     1 
Feb.    28 

By  Cash 2,000.00 

"  P.  &  L.... ." ..^137.25 

2,137.25 

2,I.S7.25 

Feb.    28 

By  Balance  (present  worth) . . .    2,137.25 

Bought. 

^MERCHANDISE  ACCOUNT.                                    SOLD. 

Jan.     4 

To  Sundries 

.   / 1,000.00 

Jan.    31 
Feb.    15 
s,^^    28 

By  Sundries 

600.00 

Feb.     1 

"    Sundries  

"  P.  a  L.* 

./, 500.00 

"    Sundries 

125.00 

28 

f (^00.25" 

"  Inv.  (Mdse.  on  htnd)*.^^^ 

.,—{975.25) 

To  Inventory 

1.700.25 

1,700.25 

Feb.    28 

- <^»7fi.2.«i 

< 1 

^            \ '        "1 

.7^^200.25 
2.00 
.10.00 
,5.00 


Feb.    28 
28 


To  Expense. 
"    Freight. 
"  Fixtures. 
**  Jno.  F.  0.  Stock* 


Jan,  31 
Feb,     1 


To  Sundries , 
"  Cash. 


Feb.     1 
28 


To  Sundries. 
"  P.  4L. 


Jan.     l! To  Sundries .....\ 


Jan.    15 
Feb.   28 


To  2  Sh.  1st  Nat.  Bk. 
"  P.  &  L.  (net  gainr 


Feb.    28  To  Inventory 


220.00 


Jan.     1 
Feb.    28 

To  2  Acrs.  In  D.  Co.  (per  deed) 
••  P.&L.  (netoain)* 

(M 

Feb.     1 
Feb.    28 

By  1  Acr.  In  D.  Co.  (sold).... 
'•  Inv.  1  Acr.  (not  sold)*.^^^;^ 

— (pJ^ 

45.00 

45.00 

Feb.    28 

To  Inv J 

20.00 

nXTURES. 


Jan.    1 


Feb.   28 


To  Office  Furniture , 


To  Inventory. 


75.00 


70.00 


Star  (*)  and  black>face  type  mean  that  the  whole  line,  including  dates,  etc.,  shoold  be 


written  in  red  ink. 


12 


SKELETON  LEDGER. 

WE  call  special  attention  to  the  diagram  on  the  opposite  page,  which  we 
term  "Skeleton  Ledger."    We  believe  that  one  with  no  knowledge  of  Book- 
keeping other  than  that  obtained  from  this  book,  can  learn  to  close  any  set 
of  books  from  a  careful  study  of  this  diagram. 

To  close  books  is  one  of  the  most  difficult  parts  of  Bookkeeping,  and,  we  might  say, 
three  bookkeepers  out  of  every  five  who  are  to-day  drawing  a  bookkeeper's  salary  can- 
not correctly  close  a  set  of  books. 

1.  We  call  attention  to  the  general  instruction  on  closing  books  found  on  page  26. 

2.  See  "Merchandise  Account"  on  opposite  page  (debit  side),  which  shows  that 
you  have  bought  $1,500  worth  of  merchandise.  The  right-hand  side  (credit  side) 
shows  that  you  have  sold  $725  of  this  merchandise.  In  order  to  correctly  declare 
profits  it  is  necessary  to  go  through  your  stock  of  goods  and  take  an  inventory,  as 
directed  elsewhere.  We  will  suppose  in  this  case  that  you  have  on  hand  merchandise, 
cost  value  of  which  is  $975.25;  this  you  call  your  "Inventory,"  which  you  credit  to 
Merchandise  account,  thus,  "February  28.  By  Inventory,  $975.25"  (all  in  red  ink). 
Next,  take  the  difference  between  the  debit  and  the  credit  of  Merchandise  account, 
including  the  inventory,  and  you  will  find  the  difference,  in  favor  of  the  credit,  to  be 
$200.25.  Then  you  enter,  in  red  ink,  to  the  debit  of  Merchandise  account  thus,  "Feb- 
ruary 28.  To  Profit  and  Loss,  $200.25,"  which  will  make  the  credit  and  debit  sides 
of  Merchandise  account  balance.  You  at  once  place  this  $200.25,  which  is  your  gross 
gain,  to  the  credit  of  Profit  and  Loss  account,  as  indicated  by  the  arrows  in  Skeleton 
Ledger.  Next,  rule  up  Merchandise  account,  as  per  diagram,  and  bring  Inventory 
down  on  the  debit  side,  in  black  ink. 

3.  Expense  Account. — By  referring  to  Expense  account,  on  opposite  page,  you  will 
find  that  it  shows  a  debit  of  $55.  Enter  on  the  credit  side  of  Expense  account,  in  red 
ink,  "By  Profit  and  Loss,  $55,"  giving  dates,  etc.,  as  shown  in  diagram;  then  transfer 
this  amount  to  the  debit  of  Profit  and  Loss  account,  as  indicated  by  arrows  in  diagram. 

Note. — As  to  when  you  should  use  red  ink,  see  page  25. 

4.  Freight  Account. — Go  to  your  Freight  account  and  close  that  into  Profit  and 
Loss  on  the  same  principle  you  closed  Expense  account.  You  can  trace  the  amounts 
from  Freight  to  Profit  and  Loss  by  following  the  arrows  in  diagram. 

5.  Stocks  and  Bonds  Account. — Go  to  your  Stocks  and  Bonds  account.  The 
debit  side  will  show  that  you  have  bought  two  shares  of  Bank  Stock,  $210.  The  credit 
side  will  show  that  you  have  sold  one  share  at  $115.  Now  you  are  ready  to  declare 
profits,  and  you  will  take  Inventory  of  Stocks  and  Bonds  account.  This  account 
shows  that  you  have  on  hand  one  share  of  Bank  Stock.  This  constitutes  your  "In- 
ventory," which  we  value  at  $105,  being  the  amount  we  paid  for  the  Bank  Stock.  We 
credit  Stocks  and  Bonds  account,  in  red  ink,  "By  Inventory,  $105,"  as  shown  in  the 
diagram.  Now,  take  the  difference  between  the  first  cost  of  this  Bank  Stock  and  the 
amount  you  sold  the  one  share  for,  including  the  amount  of  the  present  value  of  the 
one  share  not  sold,  and  Stocks  and  Bonds  account  will  show  a  gain  of  $10.  You 
can  look  at  this  matter  from  a  mathematical  standpoint  and  readily  figure  out  the 
gain,  and  you  will  see  that  Double-Entry  Bookkeeping  is  Bookkeeping  in  its  true  light. 
As  before  stated,  you  have  gained  $10  on  your  Stocks  and  Bonds.  Is  it  not  a  fact 
that  we  close  Expense  account,  or  any  other  account  on  which  we  lose,  to  the  debit  of 
Profit  and  Loss  account?  Then  does  it  not  look  reasonable  that  Profit  and  Loss 
account  should  be  entitled  to  all  gains,  if  it  has  to  stand  all  losses?     Now  carry,  as 

13 


Indicated  by  arrow  in  diagram,  this  $10  from  the  credit  of  Stocks  and  Bonds  account 
to  the  credit  of  Profit  and  Loss  account.  Then  rule  up  Stocks  and  Bonds  account, 
bringing  Inventory  down  on  debit  side,  as  shown  in  diagram. 

6.  Real  Estate  Account. — By  referring  to  Real  Estate  account,  on  page  12  (debit 
side),  you  will  see  that  you  bought  two  acres  of  land  for  $40,  and  the  credit  side  will 
show  that  you  sold  one  acre  for  $25,  which  is  a  gain  of  $5.  Now  close  this  gain  into 
Profit  and  Loss  account,  according  to  the  rules  of  Double-Entry  Bookkeeping.  Con- 
sider the  one  acre  on  hand,  which  we  will  suppose  has  not  increased  or  decreased  in 
value,  your  inventory,  the  amount  of  which  is  $20.  Credit  Real  Estate  account,  in  red 
ink,  "By  Inventory,  $20,'*  as  shown  in  diagram;  then  take  the  difference  between  the 
first  cost  of  the  real  estate,  which  is  $40,  and  the  amount  for  which  you  have  sold 
the  real  estate,  including  the  present  value  of  the  real  estate  on  hand,  and  you  will 
find  the  difference  is  $5,  and  that  the  present  value  of  the  real  estate,  including 
amount  for  which  you  have  sold  the  one  acre,  is  $5  greater  than  the  cost  price.  You 
must,  then,  admit  that  you  have  gained  $5.  If  the  selling  price  had  been  less  than  the 
cost  price,  then  you  would  have  lost  money,  and  that  loss  would  have  been  closed  to 
debit  of  Profit  and  Loss.  Now  close  this  difference,  $5,  into  Profit  and  Loss  account, 
as  per  diagram  on  page  12. 

7.  Fixtures. — By  referring  to  Fixtures  account,  on  page  12,  you  wall  find  that  you 
paid  (see  debit  side)  $75  for  office  furniture.  Now,  suppose  that  you  are  ready  to 
declare  profits,  and  that  you  consider  that  this  furniture  has  depreciated  in  value  $5; 
then  you  must  consider  the  Inventory  of  fixtures  to  be  $70.  Credit  Fixtures  account 
"By  Inventory,  $70,"  and  close  the  difference,  which  is  $5,  in.o  Profit  and  Loss.  (See 
arrows  in  diagram.) 

Note. — You  will  find  some  special  instructions  elsewhere  in  this  book  as  to  how  to  close 
Expense,  Stocks  and  Bonds,  Fixtures,  Profit  and  Loss,  Merchandise,  and  Stock  accounts. 

8.  Jno.  F.  Braughon's  Stock  Account. — Now,  we  will  suppose  that  you  have  closed 
all  the  losses  and  gains  into  Profit  and  Loss  account.  You  have  debited  Profit  and 
Loss  account  with  all  the  losses,  and  you  have  credited  it  with  all  the  gains.  Now, 
does  it  not  look  reasonable  that  if  the  debit  side  is  the  larger,  you  have  lost,  but  if 
the  credit  side  is  the  larger,  you  have  gained?  By  adding  the  two  sides  you  find  that 
the  credit  side  of  Profit  and  Loss  is  the  larger  by  $137.25,  which  amount  is  your  net 
profit.  This  you  close  into  Stock  account,  as  follows:  Enter  on  the  debit  side  of  Profit 
and  Loss,  in  red  ink,  "To  Jno„  P.  Draughon's  Stock  account,  $137.25;"  then  credit  Jno. 
F.  Draughon's  Stock  account,  in  black  ink,  "By  Profit  and  Loss,  $137.25."  (See  trans- 
fer entry  as  indicated  by  arrow  in  diagram.)  Next,  you  will  find  that  Jno.  F. 
Draughon's  Stock  account  now  shows  a  credit  of  $2,137.25,  which  is  Jno.  F. 
Draughon's  present  worth.  In  order  to  draw  a  balance  and  to  make  a  clean  start 
for  the  next  six  months'  business,  enter  on  the  debit  side  of  Jno.  F.  Draughon's  Stock 
account,  in  red  ink,  "To  balance,  $2,137.25."  In  other  words,  force  a  balance.  (But 
never  force  a  balance  in  a  Trial  Balance.  A  person  who  will  force  a  balance  in  a 
Trial  Balance  without  the  firm's  consent,  or  force  one  in  college  while  a  student, 
will  not  always  do  to  trust  with  cash.) 

9.  Rule  up  both  sides  of  Jno.  F,  Draughon's  Stock  account,  as  indicated  in  diagram, 
and  bring  balance,  $2,137.25,  down  on  credit  side.  Also  see  page  12,  where  we  have 
brought  down  on  debit  side  the  Inventory  of  Stocks  and  Bonds,  Real  Estate,  and  Fix- 
tures accounts. 

ONE  THING  AT  A  TIME. 

You  should  avoid  trying  to  do  too  much  at  a  time;  in  other  words,  you  should 
read  and  dispose  of  one  entry  before  you  advance  to  the  next  Take  them  as  they 
com& 

14 


GENERAL   INFORMATION. 

BOOKKEEPING. 

BOOKKEEPING  is  the  science  of  accounts.  There  are  two  methods  of  Book- 
keeping, Double  Entry  and  Single  Entry. 
The  fundamental  principle  of  Double  Entry  is  that  every  time  you  debit 
one  account  you  must  credit  one  or  more  accounts  with  even  amount;  in  other  words, 
every  debit  must  have  a  corresponding  credit,  and  every  credit  must  have  a  corre- 
sponding debit. 

In  Single  Entry  only  one  entry  is  made  of  each  transaction.  For  further  instruc- 
tion on  Single  Entry,  see  article  headed  "Single  Entry/*  page  24.  This  article  also 
gives  some  valuable  advice  on  Double  Entry. 

RESOURCES  (OR  ASSETS). 

Resources  are  things  of  value  belonging  to  us  (the  firm),  such  as  open  accounts 
due  us  (the  firm),  cash,  merchandise,  real  estate,  fixtures,  notes  (notes  payable  to 
us),  etc.,  on  hand. 

LIABILITIES. 

Liabilities  are  notes  and  other  obligations  due  others  by  us. 

ADVICE  TO  BEGINNERS. 

Debit  what  you  receive  and  credit  what  goes  out  of  the  house.  When  you  place 
any  article  in  care  of  a  certain  account,  you  debit  that  account  with  the  value  of  such 
article;  and  then  when  you  call  on  said  account  for  that  article,  you  must  credit  said 
account.  For  instance,  we  buy  merchandise;  we  place  merchandise  in  the  care  of 
Merchandise  account,  charging  it  with  the  amount.  When  we  transfer  merchandise 
from  Merchandise  account,  does  it  not  look  reasonable  to  you  that  Merchandise  ac- 
count should  be  credited  with  the  amount  of  merchandise  taken  from  it? 

STOCK  ACCOUNT  (COPARTNERSHIP). 

Debit  it  at  the  beginning  of  business  with  the  amount  we  owe  others  on  open  ac- 
count, notes,  etc.  Debit  it  also  with  the  net  private  loss  or  the  general  loss  if  there 
be  any  loss.  Stock  account  should  be  opened  with  each  member  of  the  firm.  As  a 
rule,  joint-stock  companies  or  corporations  do  not  transfer  the  loss  to  Capital  Stock 
account;  at  the  close  of  business  they  let  it  stand  to  the  debit  of  Profit  and  Loss, 
hoping  that  their  gain  will  soon  offset  the  loss. 

Credit  it  with  amount  invested  at  the  beginning  of  business  and  with  all  additional 
investments  (if  there  be  any),  also  with  the  net  gains,  unless  the  firm  desires  to  draw 
the  gains  out  of  the  business  instead  of  increasing  capital  stock  or  to  have  the  gains 
placed  to  the  credit  of  Private  account  subject  to  check.  Credit  it,  also,  at  the  begin- 
ning of  business  with  all  open  accounts  due  the  business,  merchandise,  fixtures,  notes 
(notes  due  us),  etc.,  on  hand. 

PROPRIETOR'S  PRIVATE  ACCOUNT. 

Debit  it  with  all  cash  and  merchandise  drawn  out  for  private  use  and  with  orders 
given  others  on  the  business  for  merchandise  or  cash. 

Credit  it  with  all  salary  allowed  the  proprietor  and  with  cash  he  may  deposit  with 
the  firm. 

CASH  ACCOUNT. 

Debit  it  (we  recommend  the  Cash  Book  as  a  Cash  account,  as  explained  elsewhere) 
with  all  cash  received  and  with  cash  on  hand  at  the  beginning  of  business;  also  with 
all  checks,  money  orders,  etc.,  we  receive,  provided  we  do  not  keep  a  Bank  account 
in  our  Ledger;  even  then  we  could  consider  checks  as  cash  till  deposited. 

.    15 


We 


Also 
also 


Mj^nciMifDfss  Accouirr. 

liillffVACTURIllO  ACCOUMT. 

fmMmm  w§  wmm  er§m  U  **9f  fm^mt^r  wuk  dw  r^om  ^  wf»rfttj  «Mds  we 
§im  1m¥4f  m  lMm4,  €l§m  Urn  iiMmme§  tel#  rnH  tmd  Lom,   Tboi  nde  19  die  ac- 

#9Mv  MMI  VrnP  WwWmKt&wj  w9wm  6W  MOTS'  flMMr 

nXTU]»B»  ACCOUNT. 
OfMi  M  «i  ^  <tf«JM»<»Wgt  ei  iHMte^aa  wUb  axaooDt  of  fixtures  on  hand.    Also 
'4i^i  a  WHM  §n  MiUl^mal  §Miwm  Wiflmrt^  ctbee  tme,  etc.,  sracfa  as  counters,  shelves, 

AtiM  M  inUl  WiiffMm  W«  i«fl  ii1il«ii  luw  bMQ  charged  to  thU  account    At  the 
iffli  W«  i$i^^  pr0it§  W#  ^<iM  li  **9r  luretttonr  in  red  ink,  with  the  ralae  of  such 

Hfiklm  m  h§»4  §§  im¥€  iwrn  ^lutnm  to  ibf«  account. 

KWft— iMftPftWf  W#  te¥«  tnWfg^  |1,W#  W<»rtb  ©f  flxttirea  which  we  have  charged  to  Fix- 

A  ^HSi»  pttf  «Wrt  &f  tMtf  Mfl&ttnU  to  cover  wear  and  tear,  rfioald  be  charged 

h  fffif,  ttn/l  #»/|f«i1  etpm  «fven  to  Kfxture*.     Take  Inventory  of  flxturea. 


rOM  awrrUFit 


'■*  i^»hi*',  »n4  mtikp  *«ntfy  on  credit  sride  of  Fixtures  account  thus,  "By 
M#»  Ut  M^^rf^ttpunin*'  Mf'UMint,  clo*<fn«  the  difference  Into  Profit  and  T»9S.  Then 
tftUig  1ftVt^tiU/ty  (U/Wh  on  d^Wt  «»de.     (gee  Fixtures  account,  article  7,  pa«e  14.) 

10 


TAXES  ACCOUNT. 

Debit  it  with  all  cash  we  pay  for  State,  county,  or  city  taxes,  license,  etc.  At  the 
rloHe  of  business  there  may  be  some  unexpired  taxes  or  license.  If  so,  we  would  ap- 
proximate the  value  of  same,  and  credit  Taxes  account  "By  Inventory,"  closing  the 
difference  Into  Profit  and  Loss,  Rule  up  and  bring  balance  down  on  debit  side.  Taxes, 
insurance,  etc.,  could  be  charged  directly  to  Expense  account.  '  We  recommend  this 
In  a  small  business. 

INSURANCE  ACCOUNT. 

This  account  is  opened  and  closed  as  Taxes  account,  as  explained  above. 
EXPENSE  ACCOUNT. 

Debit  it  at  the  commencement  of  business  with  all  stationery  and  fuel  on  hand 
(provided  we  have  no  Fuel  and  Stationery  account).  Also  debit  it  with  everything 
we  buy  for  office  use — such  as  postage  stamps,  stationery,  fuel,  etc, — and  with  all  the 
running  expenses  of  the  business.  In  a  large  business  we  recommend  Postage  or 
Stami)  account.  (If  we  have  different  Expense  accounts,  we  make  each  line  of  busi- 
ness bear  Its  part  of  the  expense.) 

Credit  it  with  anything  we  sell  that  has  been  charged  to  this  account.  Also  credit 
It  at  the  close  of  business  "By  Inventory"  with  fuel,  stationery,  etc.,  on  hand.  If  there 
be  any.  The  difference  is  closed  into  Profit  and  Loss.  Rule  up  and  bring  balance  down 
on  the  debit  side,  the  same  as  In  closing  Merchandise  account, 

FREIGHT  ACCOUNT. 

Debit  it  with  all  cash  we  pay  out  for  freight,  express  charges,  etc. 

Credit  it  with  all  cash  we  receive  as  rebate,  or  overcharge  on  freight  or  express, 
from  railroad  or  express  companies.  The  difference  is  closed  into  Profit  and  Loss.  In 
certain  lines  of  business  we  would  suggest  that  it  be  closed  into  Merchandise  account. 

NOTK. — W*r  miKht  hav('  two  FrflKht  accounlH,  Suppo.sc  that  we  arc  in  the  lumber  buHlnesa, 
have  alHo  a  merchandise  Htore,  and  the  accounts  for  both  lines  of  business  are  kept  in  one 
set  of  books.  Thus,  you  see.  It  would  be  necessary  either  to  debit  Lumber  account  directly 
with  the  freight  paid  on  lumber  or  open  a  Lumber  Freight  account;  and  it  would  also  be 
necessary  to  debit  Merchanrllse  directly  with  all  freight  paid  on  merchandise,  or  open  a  Mer- 
chandise Freight  account.  If  we  opened  two  Freight  accounts,  one  to  represent  Lumber,  the 
other  to  represent  Merchandise,  then,  at  the  close  of  business,  In  order  to  get  at  the  net  profits 
of  each  department,  it  would  be  necessary  to  transfer  Lumber  Freight  account  to  the  debit  of 
Tiumber  account,  and  Merchandise  Freight  account  to  the  debit  of  Merchandise  account. 
There  are  olh*  r  lln»'S  of  ]>UHin*HH  to  which  this  rule  also  applies, 

INTEREST.  DISCOUNT,  AND  EXCHANGE. 

Debit  it  with  all  cash  we  pay  out  as  interest  on  notes  or  open  accounts,  also  with 
exchange  on  drafts,  checks,  etc.,  and  with  discount  we  allow  a  person  for  paying  his 
account  before  it  is  due.  Also  debit  it  at  the  regular  time  of  closing  books  with  the 
accrued  lrit"r'.<^t  riue  to  date  on  notes  we  are  due  others  (provided  there  are  any  such 
notes). 

Credit  it.  with  all  cash  we  receive  as  interest  on  accounts  and  notes  due  us  and 
with  discount  allowed  us  by  others  when  we  pay  our  notes  and  open  accounts  before 
they  are  due.  Credit  It  also  at  the  close  of  business  with  the  accrued  interest  due  to 
date  on  notes  bearing  Interest  (If  there  be  any  due  us).  Remember  that,  unless  so 
specified  in  their  face,  notes  do  not  bear  Interest  until  maturity. 

Note. — The  above  account  Is  closed  into  Profit  and  Loss  at  the  close  of  business  (time  we 
declare  profits).  If  the  debit  side  is  the  greater,  we  credit  it,  In  red  Ink,  "By  Profit  and  Loss," 
and  charge  Profit  and  I^oss  In  black  ink.  If  the  credit  side  is  the  greater,  we  debit  It  to 
Profit  and  Loss  In  red  ink,  and  credit  Profit  and  T^oss  in  black  ink  with  the  difference.  A  full 
explanation  of  "How  to  Declare  Profits"  will  be  found  on  page  26. 

TRAVELING  EXPENSE  ACCOUNT. 
Debit  it  with   all   traveling  exi)enseH  of  persons  traveling  in  the  interest  of  the 
business 

Credit  it  with  all  cash  returned  by  any  of  our  agents  to  whom  we  have  given  cash 

17 


for  traveling  expenses.  Credit  it  also  at  the  close  of  the  year  "By  Profit  and  Loss:" 
or,  if  traveling  in  the  interest  of  any  special  department  of  our  business,  that  special 
department  should  be  charged  with  the  amount. 

Note. — Another  plan  is  to  charge  the  traveling  salesman's  Private  account  with  money- 
advanced  him  for  traveling  expenses,  and  v^^hen  he  turns  in  his  vouchers  credit  his  Private 
account  and  charge  the  amount  to  Traveling  Expense. 

SALES  ACCOUNT. 

Credit  it  (provided  you  keep  Sales  account)  with  all  sales  made. 

Debit  it  at  the  time  you  declare  profits,  and  credit  Merchandise  with  the  amount. 

Note. — Some  large  business  concerns  keep  Sales  account  and  credit  it  with  both  cash  and 
time  sales.  By  this  means  a  mere  glance  at  the  Sales  account  will  tell  the  total  sales  up  to 
date.    The  total  should  be  transferred  to  the  credit  of  Merchandise  when  we  declare  profits. 

SALARY  ACCOUNT. 

Debit  it  (provided  you  keep  a  Salary  account)  with  all  salaries  paid. 
Credit  it  at  the  close  of  business  "By  Profit  and  Loss." 

Note. — Some  firms  prefer  a  Salary  account,  and  charge  salaries  to  this  account  instead  of 
charging  them  to  Expense  or  to  Merchandise. 

FEED  ACCOUNT. 

Debit  it  with  all  hay,  corn,  etc.,  we  buy  to  feed  stock. 

Credit  it  at  the  close  of  business,  "By  Inventory,"  with  the  amount  of  feed  on 
hand,  also  "By  Profit  and  Loss,"  or  "By  Live  Stock  account,"  with  the  balance. 

ADVERTISING  ACCOUNT. 

Many  large  firms  spend  considerable  sums  of  money  in  advertisifig — thpusands  and 
hundreds  of  thousands  of  dollars  each  year.  Even  in  a  small  business  it  is  very 
satisfactory  to  keep  an  Advertising  account,  which  we  charge  with  all  advertising. 
At  the  close  of  business  (time  we  declare  profits)  we  should  credit  it  "By  Inventory" 
with  unexpired  advertising  contracts  and  close  the  difference  into  Profit  and  Loss 
account. 

REAL  ESTATE  ACCOUNT. 

Debit  it  at  the  commencement  of  business  with  the  Inventory  of  real  estate;  also 
debit  it  with  the  real  estate  we  buy. 

Credit  it  with  all  real  estate  we  sell. 

Note. — To  close  above  account  at  time  we  declare  profits,  we  would  estimate  the  value 
of  the  real  estate  on  hand,  and  credit  "By  Inventory"  in  red  ink.  The  difference  would  be 
debited  or  credited,  as  the  case  may  be,  to  Profit  and  Loss.  Always  rule  up  and  bring 
Inventory  down,  in  black  ink,  on  debit  side  of  all  accounts  we  have  credited  "By  Inventory." 
(See  Real  Estate  account,  "Skeleton  Ledger,"  page  12;  also  article  6,  page  14.) 

BUILDING  account! 

Debit  it  at  the  commencement  of  business  with  value  of  buildings  on  hand;  debit 
it  also  with  cost  of  new  buildings,  repairs,  etc. 

Credit  it  witb  all  rents  we  receive  and  buildings  we  sell.  A  Rent  account  might 
be  opened,  and  we  favor  .doing  so.  The  above  account  is  closed  the  same  as  Real 
Estate. 

BILLS  RECEIVABLE  ACCOUNT  (NOTES  DUE  US). 

Debit  it  at  the  commencement  of  business  with  all  acceptances  (time  drafts)  and 
notes  we  have  on  hand,  given  to  us  or  accepted  by  others.  Also  debit  it  with  all 
additional  notes  received,  and  with  time  drafts  we  draw  on  others,  provided  such 
drafts  are  accepted. 

Credit  it  with  all  notes,  acceptances,  etc.,  as  paid.  Also  credit  it  with  all  notes  we 
transfer  to  others,  which  may  be  done  in  payment  of  accounts,  notes,  etc. 

Note. — No  part  of  the  above  account  is  ever  closed  into  Profit  and  Loss  unless  we  fail  to 
collect  some  of  the  notes  or  acceptances  and  we  in  course  of  time  consider  them  worthless. 

18 


NOTES  SHOULD  AGREE. 

The  difference  between  the  "debit"  and  the  "credit"  of  Bills  Receivable  accouni 
should  agree  with  the  total  amount  of  the  unpaid  notes  found  in  Bills  Receivable 
Register  (in  case  you  keep  a  Bills  Receivable  Register,  which  you  should  do).  It 
should  also  agree  with  the  total  value  of  notes  that  you  have  on  hand.  The  book- 
keeper should  occasionally  take  his  notes,  put  down  the  face  value  of  each  on  a  slip 
of  paper,  and  see  that  the  total  amount  agrees  with  the  difference  between  the  "debit" 
and  "credit"  of  Bills  Receivable  account.  It  is  as  necessary  that  the  bookkeeper's 
notes  agree  with  Bills  Receivable  account  as  that  his  Cash  account  agree  with 
the  amount  of  cash  on  hand« 

BILLS  PAYABLE  ACCOUNT. 

Credit  it  at  the  commencement  of  business  with  all  notes  we  owe  and  time  drafts 
we  have  accepted.  Credit  it  also  with  all  notes  we  give  to  others  and  with  time  drafts 
we  accept. 

Debit  it  when  we  pay  notes  we  owe,  also  when  we  pay  time  drafts  we  have  ac- 
cepted.    (A  draft  accepted  becomes  a  note.) 

Note. — At  the  close  of  business  we  would  simply  rule  Bills  Payable  account  as  we  would 
all  accounts  that  do  not  balance,  and  bring  the  balance  down,  as  explained  elsewhere  in  this 
Book  of  Instructions,  unless  it  is  a  small  business ;  in  that  event  we  recom-  aend  that  Bills 
Receivable  and  Bills  Payable  be  itemized  in  Ledger.  In  a  large  business  a  Note  Register 
should  be  kept,  and  in  posting  to  Ledger  give  only  the  number  of  the  note,  which  will  refer 
to  the  Register  for  explanation. 

BILLS  RECEIVABLE  AND  BILLS  PAYABLE. 

Remember,  there  is  a  great  difference  between  Bills  Receivable  and  Bills  Payable 
accounts.  There  is  as  much  difference  in  handling  Bills  Receivable  and  Bills  Payable 
accounts  as  there  is  in  handling  Merchandise  and  Cash  accounts,  or  any  other  two 
accounts. 

LIVE  STOCK  ACCOUNT. 

Debit  it  at  the  commencement  of  business  with  all  horses,  mules,  cows,  hogs,  etc., 
on  hand  and  those  hereafter  purchased. 

Credit  it  with  all  horses,  cows,  hogs,  sheep,  etc.,  sold. 

Note. — At  the  close  of  business  we  would  count  the  sheep,  cows,  etc.,  on  hand ;  then  credit 
the  Live  Stock  account  "By  Inventory,"  which  represents  the  value  of  the  live  stock  on  hand. 
The  difference  would  be  closed  into  Profit  and  Loss.  The  balance  (Inventory)  would  be 
brought  down  on  the  debit  side,  as  in  dosing  Merchandise,  Real  Estate,  etc. 

MOVABLE  PROPERTY  ACCOUNT. 

Debit  it  with  all  wagons,  drays,  etc.,  you  buy  for  firm's  use,  not  with  the  view  of 
selling.  Some  firms  would  open  a  Wagon  and  Team  account,  and  not  have  any  Mova- 
ble Property  or  Live  Stock  account.  The  bookkeeper  should  be  governed  in  this  case 
by  the  amount  of  live  stock  and  movable  property  needed. 

Credit  it  with  all  articles  we  transfer  which  had  previously  been  charged  to  this 
account.     It  is  closed  the  same  as  Live  Stock  account. 

OVER  AND  SHORT  ACCOUNT. 

Debit  it  with  amount  cash  short  at  night. 

Credit  it  v/ith  amount  cash  over  at  night.  For  a  full  explanation  of  this  account, 
see  "Over  and  Short"  account  in  "Draughon's  Progressive  Bookkeeping  and  Legal 
Adviser." 

Note. — Your  Cash  account,  however,  should  never  be  over  or  short,  and  will  not  be  if  yo:; 
follow  the  rules  given  in  "Draughon's  Progressive  Bookkeeping  and  Legal  Adviser." 

BANK  ACCOUNT  (ON  DEPOSIT). 

Debit  it  with  all  cash,  money  orders,  checks,  etc.,  deposited  (provided  we  keep  a 
Bank  account).    As  explained  elsewhere,  we  could  consider  cash  in  bank  as  part  cash 

19 


on  hanri.  Where  firms  keep  accounts  with  more  than  one  bank,  some  favor  opening 
account  in  Ledger  with  each  bank.  In  such  cases  we  recommend  special  Bank  column 
in  Cash  Book. 

Credit  it  with  all  checks  or  drafts  we  draw  on  it. 

Note. — At  the  close  of  business  (time  to  declare  profits)  we  would  take  the  difference  be- 
tween the  debit  and  credit  sides  of  Bank  account  and  credit  it  "By  Balance,"  rule  up  the 
account  and  bring  balance  down  as  we  would  in  balancing  all  other  accounts  in  our  Ledger 
that  did  not  balance  at  the  time  we  closed  our  books.  Thus,  you  see,  we  would  have  a  new 
start  on  this  account  for  the  next  fiscal  year's  business.  The  footings  of  each  side  of  this  ac- 
count would  show  the  amount  of  business  done  with  the  bank. 

COTTON  ACCOUNT. 

Debit  it  at  the  beginning  of  business  with  the  amount  of  cotton  on  hand;  debit  it 
also  with  all  cotton  we  buy. 

Credit  it  with  amount  of  cotton  we  sell  or  transfer  to  others.  It  is,  also  credited, 
at  the  time  we  declare  profits,  with  the  amount  of  cotton  on  hand,  the  same  as  in 
declaring  profits  on  merchandise.  Credit  it  "By  Inventory,"  and  close  the  difference 
into  Profit  and  Loss. 

OUR  DEBTORS  (PERSONS  WHO  OWE  US). 

Debit  them  at  the  commencement  of  business  with  the  amounts  they  owe  us;  also 
with  merchandise  we  sell  them,  the  cash  we  loan  them,  and  anything  of  value  we 
give  them. 

Credit  them  with  all  cash,  checks,  money  orders,  etc.,  received  of  them  on  account 
and  with  merchandise  they  returned  to  us.  Credit  them  also  with  all  sight  drafts  we 
draw  on  them  when  paid,  with  time  drafts  they  accept,  and  with  notes  they  give  us. 
In  other  words,  credit  them  with  anything  of  value  we  receive  of  them. 

Note. — We  recon^mend  that  all  accounts  of  our  debtors,  at  the  close  of  business,  be  ruled 
up,  and  if  they  do  not  balance,  they  should  be  credited  or  debited,  as  the  case  may  be,  "By 
Balance,"  or  "To  Balance,"  and  the  balancfe  should  be  brought  down  in  order  to  give  us  a 
clean  start  on  the  next  six  or  twelve  months'  business.  Some  bookkeepers  favor  the  plan  of 
ruling  up  customers'  accounts  at  the  end  of  each  month  and  bringing  the  balance  down.  This 
does  very  well  if  the  bookkeeper  has  nothing  else  to  do,  but  we  consider  it  loss  of  time  and 
that  it  gives  chances  for  additional  errors ;  and,  in  addition  to  this,  it  takes  extra  space  in  the 
Ledger.  Another  advantage  we  have  in  leaving  the  account  open  until  the  close  of  business  is 
that  the  debit  side  represents  the  total  goods  we  sold  (provided  we  did  not  make  any  loans 
on  this  account)  ;  the  credit  side  represents  the  total  amount  of  payments  received. 

OUR  CREDITORS  (PERSONS  WHOM  WE  OWE). 

Credit  them  at  the  commencement  of  business  with  amount  we  owe  them;  also 
credit  them  with  all  merchandise  we  buy  of  them  on  account  and  cash  we  borrow  of 
them;  in  other  words,  we  credit  them  with  any  articles  of  value  received  of  them. 

Debit  them  with  all  cash,  checks,  and  money  orders  we  pay  to  them,  goods  we 
return  to  them,  overcharges,  etc.;  debit  them,  also,  with  notes  we  give  them  and  time 
drafts  they  draw  on  us. 

Note. — For  closing  the  above  account  at  the  end  of  business,  see  explanation  following 
"Our  Debtors,"  above. 

A  CONSIGNMENT. 

A  consignment  is  merchandise  received  by  us  of  others  to  be  sold  on  their  account 
and  at  their  risk.  The  consignee  does  not  himself  buy  such  property,  but  receives  it 
to  sell  for  the  consignor. 

Suppose  we  receive  of  John  Thompson  a  shipment  to  be  sold  on  his  account  and 
at  his  risk.  On  receiving  the  goods,  if  the  freight  has  not  been  prepaid,  we  debit 
"Consignment,  .John  Thompson,"  with  the  freight.  We  enter  in  our  special  Consign- 
ment Book,  the  same  as  in  recording  notes,  a  complete  record  of  the  goods.  We  charge, 
in  our  regular  book,  "Consignment,  John  Thompson,"  with  the  expense  of  handling  thifc 

20 


account.  When  we  make  a  sale  of  John  Thompson's  consignment,  we  credit  it  with  the 
full  amount  received.  Unless  we  were  doing  considerable  business  with  John  Thomp- 
son, and,  therefore,  keeping  a  regular  account  with  him,  we  would  send  him  a  check 
for  his  net  proceeds  at  once.  We  first  figure  out  the  amount  due  him,  then  send  a 
check,  charge  "John  Thompson,  consignment,"  and  credit  Cash  or  Bank  account;  also 
debit  "Consignihent,  John  Thompson,"  with  our  commission,  and  credit  either  Com- 
mission account  or  Profit  and  Loss.  When  this  is  done,  "Consignment,  John  Thomp- 
son," will  balance. 

A  SHIPMENT. 

A  shipment  is  merchandise  or  any  other  kind  of  property  we  send  to  others  to  be 
sold  on  our  account  and  at  our  risk.  The  name  of  the  account  usually  combines  the 
word  "shipment"  and  the  name  of  the  person  or  persons  to  whom  sent.  Thus:  "Ship- 
♦ment.  Jack  Wilson  &  Co.,  Memphis."  We  debit  Shipment  account  with  the  invoice 
price  of  the  property  we  send  them,  including  shipping  charges,  if  prepaid  by  us. 
When  we  receive  an  account  of  sales,  with  check,  from  Jack  Wilson  &  Co.,  we  debit 
Cash  and  credit  "Jack  Wilson,  shipment."  The  gain  or  loss,  as  the  case  may  be, 
could  be  closed  into  Profit  and  Loss  account. 

Another  plan  would  be  to  have  a  special  Shipping  Book  in  which  to  register  the 
shipment,  and  consider  it,  till  sold,  merchandise  on  hand. 

THINK  OF  IT. 

From  the  different  explanations  given  of  the  foregoing  accounts,  it  will  be  seen 
that  we  can  open  an  account  with  any  branch  of  business  and  keep  track  of  our  gains 
or  losses,  as  the  case  may  be,  in  any  department.  Should  any  of  the  departments, 
after  a  fair  trial,  not  prove  a  profitable  investment,  it  would  be  best  to  discontinue  it. 

WHEN  DO  WE  CLOSE  OUR  BOOKS? 

Some  firms  close  their  books  quarterly,  others  close  them  semiannually,  and  still 
others  close  them  annually.  We  term  it  "the  close  of  business."  The  object  in  closing 
the  books  is  to  find  whether  we  are  making  or  losing  money. 

HOW  TO  JOURNALIZE. 

As  stated  elsewhere,  we  recommend  posting  time  sales  directly  from  the  Sales  Book 
to  the  Ledger.  However,  for  the  benefit  of  those  who  are  not  familiar  with  journalizing 
sales,  we  give  some  explanations.  By  referring  to  page  9  you  will  find  that  you  sold 
merchandise  to  Grant  &  Grant,  on  the  14th  of  January,  $23.70.  First  open  your 
Journal  and  make  heading. 

Dr.  Cr. 

Sundries,  To  Mercliandise $383  70 

Grant  &  Grant,  Sales  Book,  page  9 $  23  70 

A.  B.  Pope,  Sales  Book,  page  9 360  00 

Of  course,  in  the  above  we  have  given  only  two  sales.  The  bookkeeper  should  leave 
the  heading  open  in  the  Journal,  and  insert  the  name  and  total  amount  from  the  Sales 
Book  throughout  the  month's  business.  At  the  end  of  the  month  add  the  total  debit 
column  and  place  the  amount  in  the  credit  column  opposite  "Sundries  to  Merchandise." 
Some  might  think  that  this  would  conflict  with  other  entries  to  be  made  in  the 
Journal.  On  the  first  of  the  month  the  bookkeeper  can  form  an  idea  as  to  how  much 
space  will  be  required  for  the  monthly  sales  and  leave  that  much  space  for  journal- 
izing sales;  or  he  can  estimate  the  amount  of  space  required  for  making  other  entries 
in  the  Journal,  leave  such  amount  of  space  each  month  as  he  deems  necessary,  and 
begin  to  journalize  sales  on  the  second  or  third  blank  page,  as  the  case  may  be.  When 
transferring  sales  to  the  Journal,  the  bookkeeper  should  insert  in  Sales  Book,  just 
to  the  left  of  each  name,  "J — ,"  giving  the  Journal  page.  He  should  also  insert  in  the 
Journal  the  number  of  Sales  Book  page. 

21 


THE  LEDGER. 

AS  will  be  seen  from  the  following  diagram,  the  Ledger  is  the  "rendezvous"  of  all 
accounts.  At  any  time  we  desire  to  know  the  condition  of  an  account  we  refer 
to  the  Ledger;  but,  of  course,  we  must  satisfy  ourselves  that  all  entries  that  affect  that 
account  have  been  posted.  See  article  on  page  29,  "How  to  Tell  the  Condition  of  an 
Account." 

DIAGRAM. 


tf?/A£.  BALANCE 


THE  TRIAL  BALANCE. 

As  stated  elsewhere,  the  fundamental  rule  in  Double-Entry  Bookkeeping  is:  "Every 
time  you  debit  one  account  you  must  credit  one  or  more  accounts  with  an  equal 
amount;  in  other  words,  every  debit  must  have  a  corresponding  credit,  and  every 
credit  must  have  a  corresponding  debit." 

As  you  will  note  from  the  above  diagram,  the  left-hand  side  of  a  Ledger  page  is  the 
debit  side,  and  the  right-hand  side  is  the  credit  side.  Note,  as  an  illustration,  the 
scales  in  the  above  diagram.  They  are  now  balanced.  Suppose  we  place  five  silver 
dollars  on"  the  left-hand  side  of  the  scales  and  four  silver  dollars  on  the  right-hand 
side;  is  it  not  reasonable  to  suppose  that  the  left-hand  side  will  come  down  and  the 
right-hand  side  go  up?  In  other  words,  the  scales  will  be  thrown  out  of  balance,  and 
we  shall  know  that  something  is  wrong.  Now,  we  will  suppose  that  we  debit  one 
Ledger  account  (left-hand  side)  with  $15,  credit  another  Ledger  account  (right-hand 
side)  with  $20.  You  will  readily  see,  in  taking  a  trial  balance,  fhat  when  you  place 
$15  on  the  left-hand  side  of  your  trial  balance  and  $20  on  the  right-hand  side,  your 
Ledger  will  be  out  of  balance  just  $5,  supposing  that  no  other  errors  have  occurred. 
As  explained  elsewhere,  in  taking  a  trial  balance,  you  begin  with  the  first  account  in 
the  Ledger.  If  you  do  not  keep  Cash  account  in  the  Ledger,  first  get  cash  from  the 
Cash  Book  (amount  on  hand  comes  on  the  debit  side  of  trial  balance) ;  proceed  through 
your  Ledger,  placing  all  debits  on  the  debit  side  and  all  credits  on  the  credit  side  of 
your  trial  balance;  then  add  both  debit  and  credit  columns.  The  totals  should  agree. 
Of  course,  you  will  understand  that  when  you  find  an  account  that  shows  both  debits 
and  credits,  you  take  the  difference  between  the  two  sides  and  place  it  on  the  trial 
balance.  For  instance,  John  Jones's  account  is  debited  with  $75  and  credited  with 
$50.  You  take  the  difference  between  the  debit  and  the  credit,  which  shows  a  balance 
of  $25;  this  amount  you  place  on  the  debit  side  of  your  trial  balance.  In  case  the 
account  shows  a  credit,  the  difference  will  come  on  the  credit  side  of  your  trial  balance. 
Include  all  debits  and  credits  of  a  Ledger  account  when  figuring  the  differences  between 
debits  and  credits,  regardless  of  dates. 

22 


THE  CASH  BOOK. 

THE  Cash  Book  is  a  book  of  original  entry,  and  we  consider  it  the  Ledger  account 
for  the  cash.  For  instance,  you  receive  of  John  Jones,  cash  on  account,  $50. 
You  enter  the  amount  on  the  left-hand  side  of  the  Cash  Book  (debit  side) ;  then  and 
there  you  consider  Cash  debited  with  $5U.  This  must  be  posted  to  the  credit  of  some 
account,  for  two  reasons:  First,  John  Jones  is  entitled  to  credit,  because  he  paid  you 
the  rash;  second,  you  must  find  a  credit  to  offset  the  debit,  in  order  to  comply  with 
the  rules  of  Double-Entry  Bookkeeping.  Now,  if  you  will  refer  to  the  diagram  on 
opposite  page,  noting  the  arrows,  you  can  trace  an  entry  from  the  debit  side  of  your 
Cash  Book  to  the  credit  side  of  your  Ledger.  The  same  rule  applies  to  cash  paid  out. 
For  instance,  you  remit  Simmons  Hardware  Company,  St.  Louis,  Mo.,  $50;  you  enter 
the  amount  on  the  credit  side  (right-hand)  of  the  Cash  Book  and  post  it  to  the  debit 
side  of  the  Ledger,  as  indicated  by  the  arrows  in  the  diagram.  This  gives  a  credit  to 
Cash  account  and  a  debit  to  Simmons  Hardware  Company's  account,  complying  with 
the  rules  of  Double-Entry  Bookkeeping. 

In  thinking  of  the  Cash  Book  as  your  Cash  account,  view  the  matter  from  the  same 
standpoint  that  you  would  Merchandise  account  in  your  Ledger.  You  charge  Mer- 
chandise account  with  all  the  merchandise  received,  and  credit  Merchandise  account 
with  all  merchandise  that  goes  out  of  the  house.  The  difference  between  the  debits 
and  credits  of  merchandise  would  show  you  the  amount  of  merchandise  on  hand, 
were  it  not  for  the  fact  that  you  are  supposed  to  receive  more  for  the  merchandise 
when  sold  than  you  paid  for  it.  This  will,  however,  give  a  good  illustration  for  your 
cash;  but  the  cash  does  not  change  in  value.  On  the  left-hand  side  of  your  Cash 
Book  you  enter  all  cash  that  comes  into  the  house;  on  the  right-hand  side,  all  cash 
that  you  pay  out.  Now,  does  it  not  look  reasonable  that  if  you  subtract  the  footing  of 
the  right-hand  page  of  the  Cash  Book  (credit  side)  from  that  of  the  left-hand  page 
(the  debit  side),  it  will  show  you  the  actual  amount  of  cash  you  should  have  on 
hand,  and  that  if  your  cash  on  hand  does  not  agree  with  this  amount,  you  have  either 
paid  out  or  received  cash  for  which  you  have  made  no  entry  or  have  made  an  error 
in  paying  out  or  receiving  cash? 

It  is  a  very  difficult  matter  for  the  student  to  learn  how  to  balance  his  Cash 
account.  In  order,  therefore,  to  make  him  see  the  point  more  plainly,  we  give  a 
further  illustration:  Suppose  you  place  fifteen  cocoanuts  in  one  end  of  a  box  and  take 
ten  out  at  the  other  end;  how  many  cocoanuts  will  be  left  in  the  box?  The  same 
rule  will  apply  to  your  Cash  Book.  Suppose  you  receive  on  the  debit  side  (left- 
hand)  $15,  and  you  pay  out  on  the  credit  side  (right-hand)  $10;  how  many  dollars 
should  you  have  on  hand,  and  how  could  you  balance  your  cash?  Why  shouldn't 
your  cash  on  hand  agree  with  the  difference  between  the  debit  and  credit  columns 
of  your  Cash  Book? 

THE   JOURNAL. 

In  the  Journal  we  enter  all  such  items  as  goods  we  buy  on  time,  goods  returned  to 
us,  goods  we  return  to  others,  cross  entries,  etc.  From  the  Journal  the  entries  are 
carried  to  the  Ledger.  This  we  call  "posting."  (See  diagram  on  page  22.)  In  making 
entries  in  the  Journal,  they  should  be  so  arranged  as  to  give  a  debit  and  a  credit  for 
each  entry.  You  may  have  a  debit  of  $100  to  one  account  and  credits  to  several  ac- 
counts that  would  aggregate  $100.  E^stend  these  credits  into  the  right-hand  column — 
the  credit  column — of  the  Journal,  ad^  the  amounts,  and  place  lotal  in  the  left-hand 
column — the  credit  column — opposite  fne  one  account  to  be  debited  in  one  entry;  or, 
if  you  have  several  debits  to  one  credit,  arrange  them  in  your  Journal,  vice  versa. 
As  stated  elsewhere,  the  bookkeeper  shoulJ  give  a  full  explanation  in  the  "explanatory 
columns"  of  the  Cash  Book,  Journal,  and  Sales  Book. 

SALES  BOOK. 

The  Sales  Book  is  also  a  book  of  original  entry,  but  ra  eno^  mt'if  for  entering  time 
sales.    We  post  the  total  amount  of  each  purchase  directly  to  the  debit  of  our  Ledger, 

23 


and  at  the  end  of  the  month  credit  Merchandise  with  the  total  time  sales  for  the 
month.  Some  bookkeepers  journalize  sales — that  is,  they  transfer  from  the  Sales 
Book  to  the  Journal  the  name  of  each  person,  with  the  total  amount  of  his  bill.  Prom 
the  Journal  the  account  is  posted  to  the  Ledger.  We  see  no  reason  for  this  extra  work. 
The  additional  work  gives  chances  for  additional  mistakes.  Extra  work  always  in- 
creases liability  to  mistakes.  The  best  way  to  do  anything  is  to  do  it  directly  and  with 
as  little  unnecessary  work  as  possible.  Suppose  we  start  from  Louisville,  Ky.,  to  New 
York,  going  by  way  of  Chicago,  where  we  spend  a  few  days,  or  we  might  take  a  direct 
route.  The  shorter  distance  we  travel,  the  less  likely  we  are  to  be  the  victims  of  rail- 
road accidents.    So  in  making  entries,  the  less  work,  the  fewer  chances  for  mistakes. 

MEMORANDUM  BOOK. 

In  different  parts  of  this  book  we  frequently  refer  to  a  memorandum  book.  We 
wish  to  explain  this  more  fully  by  saying  that  this  memorandum  book  is  used  merely 
to  make  a  memorandum  of  the  entry,  and  from  this  the  entry  should  be  transferred 
by  the  student  to  the  Cash,  Journal,  or  Sales  Book,  as  the  case, may  be.  In  teaching 
Bookkeeping  we  use  memorandum  book  to  give  you  an  opportunity  to  test  your 
knowledge.  If  we  did  not  give  full  explanations  of  the  different  entries  as  they  come, 
and  require  the  student  to  make  them  in  good  style  in  the  proper  books,  his  knowledge 
could  not  be  successfully  tested.  Were  we  to  make  all  the  entries  directly  in  the  Cash, 
Journal,  or  Sales  Book,  as  the  case  might  be — which  should  be  done  in  the  proper 
style  in  regular  business — the  student  would  have  nothing  to  do  but  copy  our  work, 
and  in  doing  this  he  would  increase  his  knowledge  very  little.  The  most  difficult  part 
of  Bookkeeping  is  to  get  the  entries  in  the  proper  forms  in  the  books  of  original  entry. 
Any  person  of  ordinary  intelligence  can  be  taught,  if  the  instructions  are  given  as  they 
should  be,  to  post,  take  trial  balance,  etc.,  in  a  very  few  days  (and  we  might  say  in  a 
very  few  hours) ;  but  it  requires  time  and  full  explanations,  backed  by  application,  to 
learn  to  make  the  entries  properly  in  the  books  of  original  entry.  After  the  plans  for 
building  a  house  have  been  drawn  and  the  framework  constructed,  it  is  but  little 
trouble  for  even  a  "jackleg"  carpenter  to  finish  it.  In  actual  business,  in  most  cases, 
a  bookkeeper  has  no  use  for  what  we  call  a  "memorandum  book"  (some  term  it  a 
"Day  Book").  However,  it  is  still  used  by  some  bookkeepers.  We  recommend  the  use 
of  a  memorandum  book  in  actual  business  only  where  the  bookkeeper  is  required  to 
act  as  salesman  part  of  the  time,  and  in  such  case  he  should,  during  the  day,  make  a 
memorandum  of  entries;  then,  at  night  or  at  his  leisure,  transfer  the  entries  to  the 
proper  books.  A  memorandum  book  may  be  kept  for  clerks  and  others  to  record 
entries. 

SHOULD  ITEMIZE. 

A  bookkeeper  should  give  full  explanation  of  each  entry  in  "explanatory  column" 
Of  the  Cash,  Journal,  or  Sales  Book,  or  in  any  other  book  of  original  entry.  We  have 
known  some  bookkeepers  to  get  into  serious  trouble  by  making  only  a  few  explanations. 

CLASSIFYING  ACCOUNTS. 

Stock,  Profit  and  Loss,  Merchandise,  Interest  and  Discount,  etc. — in  fact,  all  ac- 
counts except  Customers'  and  Creditors' — should  come  in  the  first  part  of  the  Ledger. 
Then  you  should  give  the  second  part  of  the  Ledger  to  either  Customers  or  Creditors, 
and  the  third  part  to  the  others.  As  to  the  number  of  pages  required  for  each  account, 
the  bookkeeper  should  exercise  good  judgment. 

SINGLE-ENTRY  BOOKKEEPING. 

Almost  any  person  can  keep  books  by  Single  Entry.  In  Single  Entry,  personal 
accounts  only  are  kept  in  the  Ledger.  In  short,  Single  Entry  is  a  loose  way  of  keeping 
accounts — no  system  whatever.  Many  bookkeepers  and  business  firms  do  not  even 
credit  a  person  with  amount  received  of  him  on  account.    When  paid,  they  simply  turn 

24    ■ 


to  the  account,  if  they  have  opened  an  account,  and  mark  it,  in  red  or  black  ink, 
"Paid."  Many  persons  who  keep  books,  who  call  themselves  "bookkeepers,"  would  not 
know  what  a  Trial  Balance  is  if  they  should  see  one.  Some  will  tell  you  that  they 
keep  books  Double-Entry,  because  they  use  a  Ledger  which  has  a  debit  and  a  credit 
side.  They  charge  a  customer  with  what  he  buys  and  credit  him  with  what  he  pays. 
They  call  that  "Double  Entry"  because  they  do  not  know  what  Double  Entry  is.  If  you 
ask  them  whether  or  not  they  take  a  Trial  Balance  each  month,  they  will  tell  you 
"yes,"  but  as  soon  as  you  are  gone,  will  look  into  a  dictionary  to  find  out  what  a  Trial 
Balance  is. 

By  Single  Entry,  should  you  sell  John  Smith  merchandise  on  time,  and  enter  the 
sale  in  your  Sales  Book,  but  never  post  it  to  your  Ledger,  the  amount  would  be  lost, 
unless  John  Smith  voluntarily  stated  to  you  the  facts  regarding  his  purchase.  While 
most  people  are  honest,  there  are  few  who  can  remember  the  different  articles  bought, 
dates,  etc.  By  Single  Entry,  if  you  should  by  mistake  post  to  the  credit  of  John  Smith's 
account,  when  you  should  have  posted  to  his  debit,  you  are  loser  just  double  the 
amount  posted,  as  you  have  no  method  of  detecting  the  error.  By  Single  Entry  you 
may  intend  to  credit  John  Jones  with  fifty  cents,  but  credit  him  with  fifty  dollars.  You 
have  no  way  of  detecting  your  error.  Of  course,  you  might  accidentally  stumble  upon 
a  few  errors  of  this  kind,  but  in  many  cases  it  might  be  too  late  to  rectify. 

Double-Entry  Bookkeeping  is  somewhat  similar  to  clockwork.  If  a  wheel  of  any 
importance  be  removed  or  misplaced  in  it,  the  clock  will  not  run,  because  the  balance 
of  its  mechanism  has  been  destroyed.  The  same  is  true  of  Double-Entry  Bookkeeping: 
if  you  post  the  wrong  amount  to  your  Ledger  or  post  to  the  wrong  side  or  make  an 
error  in  addition,  the  Ledger  will  not  balance.  The  Trial  Balance  will  detect  all  such 
errors. 

WHEN  WE  USE  RED  INK. 

It  is  not  absolutely  necessary  to  use  red  ink  in  Bookkeeping.  Good  taste,  however, 
suggests  that  it  be  used  in  making  all  closing  entries  through  the  Ledger,  in  trans- 
ferring accounts  in  the  Ledger,  and  in  ruling  up  accounts.  In  transferring  accounts 
in  Ledger  red  ink  denotes  that  the  entry  is  carried  elsewhere;  in  other  words,  any 
entry  inserted  in  the  Ledger  in  red  ink  indicates  that  the  amount  is  carried  to  another 
place  and  entered  in  black  ink. 

'*  EXPLANATORY  COLUMN  "—COMMENTS. 

While  making  entries  in  Journal  or  Cash  Book,  keep  your  explanations  in  "ex- 
planatory columns."  Never  run  over  the  ruled  lines  to  the  right,  and  never  let  your 
explanations  come  closer  than  two  inches  of  left  margin.  See  our  printed  Cash  Book 
and  Journal  elsewhere  in  this  book.  If  your  Cash  Book  and  Journal  are  not  ruled 
for  "explanatory  columns,"  you  should  rule  them  according  to  paragraphs  9,  10,  page  34. 

HOW^  TO  MARK  THE  COST  AND  SELLING  PRICES  OF  GOODS. 

Firms,  who  do  not  want  the  public  to  know  their  cost  or  selling  price  of  goods,  use 
words  containing  ten  letters  or  characters,  each  representing  a  figure.  Take  the  word 
"Vanderbilt,"  for  instance.  Now  suppose  we  buy  shoes  at  $36  per  dozen.  Business 
firms  generally  add  10  per  cent  to  the  cost  price  for  freight,  drayage,  etc.  Example: 
Shoes  at  $36  per  dozen,  with  10  per  cent  added — total  cost  price,  $39.60  per  dozen.  The 
cost  of  each  pair  of  shoes  would  be  $3.30.  We  will  suppose  that  we  mark  this  grade 
of  shoes  to  sell  at  $4.25  per  pair,  as  below: 

Vanderbilt 

1    38  4567890 

Nnt — cost. 

Example  

Dae — selling  price. 
An  extra  letter,  called  a  "repeater,"  can  be  used  to  prevent  the  repetition  of  any 
letter. 

25 


CASH  ACCOUNT  IN  THE  LEDGER. 

This  account  is  used  when  you  run  the  cash  through  the  Journal  and  do  not  use 
a  Cash  Book  for  the  Cash  account.  It  is  handled  on  the  same  principle  as  any  other 
account.  You  debit  it  with  the  amount  of  cash  you  receive,  and  credit  it  with  the 
amount  of  cash  you  pay  out.  The  difference  between  debit  and  credit  should  agree 
with  the  amount  of  cash  on  hand. 

DATES. 

Bookkeepers  should  be  careful  to  date  their  books  of  original  entry  each  day,  pro- 
vided they  have  occasion  to  use  them  each  day.  Many  bookkeepers  often  allow  their 
books  to  run  several  days  without  entering  the  date  of  each  day's  transactions.  This 
is  liable  to  give  them  trouble,  especially  so  if  any  disputes  as  to  accounts  should  ever 
arise  necessitating  the  books  being  carried  into  court. 

A  NOTE  OR  AN  ACCEPTANCE. 

Many  intelligent  persons  do  not  know  what  an  acceptance  is.  Legally  speaking, 
it  is  the  same  as  an  ordinary  note.  Suppose  you  draw  a  draft  on  Smith  &  Co.  at  thirty 
days'  sight.  If  they  accept  the  draft,  they  write  across  its  face  (using  red  ink)  the 
word  "Accepted,"  giving  date  accepted,  and  sign  "Smith  &  Co."  This  draft,  after  being 
accepted  by  Smith  &  Co.,  has  the  sanie  effect  in  law  as  to  Smith  &  Co.  as  a  note  exe- 
cuted by  them.  It  is  different  only  in  form.  Such  paper  is  called  "an  acceptance" 
instead  of  "a  note,"  but  the  same  entries  are  made  in  your  books  as  if  you  received 
a  note  regularly  executed  by  Smith  &  Co. 

GENERAL  RULES  FOR  DECLARING  PROFITS 

(When  Making  Closing  Entries  Directly  Through  Ledger). 

First. — Post  up. 

Second. — Take  Trial  Balance. 

Third. — Take  Stock  (amount  merchandise  on  hand). 

Fourth. — Credit  Merchandise  account  in  red  ink  "By  Inventory." 

Fifth. — Take  difference  between  Dr.  and  Cr.  of  Merchandise  account,  including  Inventory. 

Sixth. — If  Merchandise  account  shows  a  credit,  debit  it  in  red  ink,  "To  Profit  and  Loss," 
and  credit  Profit  and  Loss,  in  black  ink,  "By  Merchandise"  with  the  difference. 

Seventh. — If  Merchandise  account  shows  a  debit,  credit  it  "By  Profit  and  Loss"  in  red  inli, 
and  debit  Profit  and  Loss,  in  black  ink,  "To  Merchandise,"  giving  each  Ledger  folio. 

Eighth. — Credit  Expense,  Freight,  Insurance,  or  any  other  account  on  whicli  you  lose, 
In  red  ink.  "By  Profit  and  Loss."  Debit  Profit  and  Loss  "To  Expense,"  "To  Freight,"  or  "To 
Insurance,"  in  black  ink,  always  giving  each  Ledger  folio  carried  to  or  brought  from. 

Ninth. — If  any  of  your  accounts  show  gain,  such  as  Interest,  Discount,  Commission,  etc., 
debit  these  accounts,  in  red  ink,  "To  Profit  and  Loss,"  and  credit  Profit  and  Loss  with  same 
in  black  ink. 

Tenth. — Have  Stock  accounts  to  pay  off  Private  accounts  unless  it  be  a  Stock  Company. 

Eleventh. — Rule  up  Merchandise  account  and  bring  down  Inventory  on  debit  side.  (See 
Merchandise  account,  page  12,  debit  side,  February  28;  Inventory,  975.25.) 

Twelfth. — Take  Trial  Balance. 

Thirteenth. — Make  out  a  Statement  of  Business. 

Fourteenth. — As  to  what  you  should  do  with  Profit  and  Loss,  should  it  show  a  gain,  will 
be  for  the  proprietor  or  the  stockholders  to  decide.  Some  would  have  the  gain  placed  to  the 
credit  of  their  respective  Stock  accounts,  while  others  would  draw  the  net  earnings  out  of 
the  business — that  is,  have  them  placed  to  the  credit  of  their  respective  Private  accounts, 
subject  to  their  checks. 

Fifteenth. — After  making  a  Statement  of  the  Business,  you  would,  in  regular  business,  be 
ready  to  continue  your  bookkeeping,  but,  in  order  for  the  student  to  work  the  set  over,  he 
should  close  out  all  accounts  as  directed  below. 

POINTS  ON  CLOSING  BOOKS  WHEN  GOING  OUT  OF  BUSINESS. 

First. — Have  every  person  who  owes  you  to  pay  you  on  open  accounts,  notes,  etc. 

Second. — Pay  off  all  accounts,  notes,  etc.,  you  owe. 

Third. — Sell  merchandise,  fixtures,  etc.   (as  per  instructions). 

Fourth. — Take  another  Trial  Balance  and  rule  up  all  Ledger  accounts  that  will  balance. 

Fifth. — Divide  your  Profit  and  Loss  according  to  amount  each  partner  has  invested. 

Sixth. — After  closing  out  all  accounts,  except  Cash  and  Stock,  rule  up  your  Cash  Book  and 
bring  the  balance  down  on  debit  side.     It  should  agree  with  Stock  account. 

Seventh. — Pay  off  Stock  account,  which  will  take  all  your  cash.  Then  all  your  accounts 
will  balance. 

26 


MEMORANDUM   ENTRIES. 


Note. 


JNO.  F.  DRAUGHON  SET. 

-The  student,  in  working  this  set,  should  use  the  current  year. 


T  N  this  set  the  student  may  substitute 
■*'  his  name  for  that  of  Jno.  F.  Draughon, 
or  he  may  continue  the  business  in  the 
name  of  Jno.  F.  Draughon,  supposing  that 
he  (the  student)  is  the  bookkeeper  and 
that  Jno.  F.  Draughon  has  this  day 
started  in  the  grocery  business. 

JANUARY   1,    19—. 

Jno.  F.  Draughon  invests  cash,  $2,000. 

Note. — Debit  Cash  account  and  credit  Jno. 
F.  Draughon's  Stoclc  account.  Enter  in  Cash 
Book.  For  form  of  making  entry,  see  printed 
Cash  Book  (left  hand),  page  6,  entry  No.  1. 
For  instructions  on  Stock  account  and  Cash 
account,  see  page  15. 

N.  B. — Before  you  make  the  entry,  read  the 
instructions  to  which  we  refer  you ;  also  see 
entries  to  which  we  refer  you,  which  will  give 
you  the  correct  form  for  making  entries.  In 
this  set  we  have  made  in  good  style  each  en- 
try for  you  to  use  as  a  guide.  Should  we  fail 
to  refer  you  to  an  explanation  regarding  any 
entry  you  are  required  to  make,  read  and  fol- 
low the  instructions  on  page  58,  headed,  re- 
spectively, "How  to  Catch  the  Ideas"  and 
"Search  for  Information."  The  student  will 
also  note  that  we  have  not  only  made  the  en- 
tries in  the  books  of  original  entry,  but  have 
posted  each  month's  business  and  taken  a 
Trial  Balance,  also  closed  out  the  set — all  of 
which  work  may  be  used  as  a  guide.  After 
the  student  works  this  set  once  or  twice,  he 
should  make  his  entries  without  referring  to 
our  printed  books.  This  is  fully  explained  else- 
where, under  heading,  "The  Course  Outlined." 
THE  FOUR  PRINCIPAL  BOOKS. 

Turn  to  pages  22,  23,  and  read  the  instruc- 
tions and  make  a  careful  study  of  the  dia- 
gram given  therein  of  the  different  books.  The 
student  should  study  this  diagram,  and  read 
the  explanations  often  while  making  entries  in 
this  set.  After  he  makes  some  of  the  entries 
he  can  then  better  appreciate  the  instructions 
we  have  given  on  these  books  and  the  advan- 
tages of  studying  diagram  of  the  different 
books.  Making  the  entries  as  above  stated 
assists  in  understanding  the  diagram  and  in- 
structions ;  and  studying  the  diagram  and 
carefully  reading  the  instructions  assist  the 
student  in  understanding  how  to  make  the 
entries  in  this  set.  One  aids  the  student  to 
understand  the  other. 

ENTRIES   CONTINUED. 

Paid  cash  for  store  rent,  $25;  paid  cash 
for  coal  for  office  use,  $2. 

Note. — Debit     Expense     account     with     the 


above  en.tries  (or  you  could  make  the  two  en- 
tries in  one)  and  credit  Cash.  For  form  of 
making  these  entries,  see  our  printed  Cash 
Book  (right-hand  side),  page  6,  entries  Nos. 
4  and  5.  For  instructions  when  to  debit  and 
credit  Expense  account,  see  page  17  ;  also  see 
instructions  on  Cash  account,  page  15. 
IMPORTANT  RULE. 
Commit  to  memory  paragraph  2  of  article 
"Bookkeeping,"  page  15.  If  the  student  can- 
not readily  commit  to  memory  this  rule,  it 
would  be  well  for  him  to  copy  it  on  a  piece 
of  paper. 

Jan.  6.  Bought  on  time  as  follows: 
Houston,  Meeks  &  Co.,  bill  23d  ult,  $200; 
Wickham  &  Pendleton,  bill  6th  inst,  $300; 
Orr,  Jackson  &  Co.,  bill  6th  inst,  $100. 

Note. — Journal  entry  for  above :  Debit  Mer- 
chandise and  credit  the  different  firms.  For 
form  of  making  entries,  see  our  printed 
Journal,  page  8,  entries  Nos.  1  to  4  ;  also  see 
instructions  on  Merchandise  account,  page  16, 
and  instructions  on  Creditors'  account,  page 
20.  Just  before  and  just  after  you  make  each 
entry,  read  instructions  to  which  we  refer  you. 

Jan.  14.  Mdse.  Cash  sales  this  day,  $25 
(debit  Cash  and  credit  Mdse.);  paid  cash 
for  freight  from  St.  Louis,  $20  (debit 
Freight  and  credit  Cash) ;  paid  cash  for 
stamps  for  office  use,  $1  (debit  Expense 
and  credit  Cash). 

Note. — Enter  the  above  in  Cash  Book.  For 
form,  see  our  printed  Cash  Book,  page  6,  en- 
tries Nos.  2,  6,  7.  Also  see  instructions  on 
Merchandise  account,  page  16  ;  Cash  account, 
page  15;  Freight  account,  page  17;  Expense 
account,  page  17.  The  explanations  will  as- 
sist you  in  making  the  entry. 

Jan.  14.  Sold  on  time  as  follows:  Grant 
&  Grant,  Guthrie,  Ky.,  1  bbl.  G.  sugar, 
300  lbs.,  at  71/.C.  per  lb.;  2  M.  W.  P.  caps, 
at  60c.  per  M. 

Jan.  31.  Sold  to  A.  B.  Pope,  on  acct.,  10 
bbls.  flour,  XXX,  at  $6  per  bbl.;  100  bbls. 
meal,  at  $3  per  bbl. 

Note. — Debit  Grant  &  Grant  and  A.  B. 
Pope  in  Sales  Book  and  credit  Merchandise. 
For  form,  see  printed  Sales  Book,  page  9,  en- 
tries Nos.  1,  2.  Also  see  instructions  on  "Our 
Debtors,"  page   20  ;   "Merchandise,"  page  16. 

Mdse.  Cash  sales,  $200. 
Note. — Debit  Cash  and  credit  Merchandise. 
See  form  in  printed  Cash  Book,  page  6.  entry 


27 


No.  3.  In  business  cash  sales  should  be  en- 
tered in  Cash  Book  each  day.  Also  see  in- 
structions on  "Merchandise,"  page  16 ; 
"Cash,"  page  15. 

JANUARY  31,  19—. 
Balance  your  Cash  Book.     See  explanations 
on  page   29,    "How  to   Balance   Cash   Book;" 
also  see  form  in  Cash  Book,  page  6. 

1.  Your  Cash  Book  should  show  $2,177  cash 
on  hand. 

2.  Your  Journal  footings  should  be  $600. 

3.  Your  Sales  Book  footings  should  be 
$383.70.     Read  the  following,  then  post: 

HOW  TO  POST. 

Posting  is  the  transferring  of  accounts  from 
books  of  original  entry  to  Ledger,  as  follows  : 
CASH  BOOK. 

By  referring  to  your  Cash  Book,  page  6, 
you  find  that  you  have  debited  Cash  and  cred- 
ited Jno.  F.  Draughon's  Stock  account  with 
$2,000.  Open  account  in  your  Ledger  on  page 
1.  For  form,  see  Jno.  F.  Draughon's  Stock 
account  in  our  printed  Ledger,  page  2.  Write 
"Jno.  F.  Draughon's  Stock  Account"  in  heavy 
script,  then  enter  on  the  credit  (right-hand) 
side  of  his  account,  the  year,  the  month,  and 
the  day,  and  in  the  explanatory  column,  "By 
Cash,"  extending  the  $2,000  into  the  money 
column  (see  page  2).  Insert  the  number  of 
your  Ledger  page  in  your  Cash  Book,  and  in- 
sert the  Cash  Book  page  in  your  Ledger. 
Thus  you  proceed  to  post  all  the  accounts 
you  have  entered  on  the  left-hand  side  of 
your  Cash  Book  to  the  respective  accounts 
(credit  or  right-hand  side)  in  the  Ledger,  on 
the  principle  given  above. 

By  referring  to  the  right-hand  side  (credit 
side)  of  your  Cash  Book,  you  find  the 
iirst  item,  "Expense  account,  $25."  Go  to 
your  Ledger  and  open  an  Expense  account 
(see  "Expense  Account"  in  our  Ledger,  page 
2),  and  post,  on  the  same  principle  you 
posted  your  Stock  account,  except  you  en- 
ter the  amount,  etc.,  on  the  debit  side  (left- 
hand-side)  of  Expense  account,  instead  of  on 
the  credit  side  (for  form,  see  "Expense  Ac- 
count," page  2).  You  continue  to  post  all  the 
items  from  the  right-hand  side  of  your  Cash 
Book  to  the  debit  side  (left  side)  of  your 
Ledger  for  the  month  of  January,  until  you 
have  posted  the  entire  month. 
JOURNAL. 

By  referring  to  your  Journal,  page  8,  you 
find  that  you  have  bought  merchandise  of 
different  firms.  Open  ah  account  in  the 
Ledger  with  each  firm.  Index  each  account 
you  open  in  the  Ledger  (see  our  Index, 
page  1),  and  credit  each  firm  with  its 
amount,  giving  date,  etc.  First  account, 
Houston,  Meeks  &  Co.,  $200.  Open  an  ac- 
count with  them  on  Ledger  (see  H.,  M.-  &  Co. 
account,  page  3).  Enter  on  the  credit  side 
(right-hand)  of  their  account  $200,  giving 
dates,  etc.  Post  Wickham  &  Pendleton,  also 
Orr,  Jackson  &  Co.,  by  same  plan.  After  you 
have  credited  each  with  its  amount,  you  debit 


Merchandise  in  one  entry  with  the  total 
amount  of  goods  bought  during  the  month, 
which  is  $600.  (For  form,  see  "Merchan- 
dise Account,"  page  2,  debit  side.)  Be  sure 
to  give  the  date,  and  insert  Journal  page  in 
the  Ledger  and  Ledger  page  in  the  Journal. 
For  form  and  explanation  to  be  given  when 
posting,  see  "Merchandise  Account,"  page  2 
of  this  book ;  see  also  Houston,  Meeks  &  Co.'s 
account  in   Ledger,   page   3. 

After  posting  from  the  Journal,  you  will 
go  to  your  Sales  Book. 

SALES   BOOK. 

By  referring  to  your  Sales  Book,  you  find 
that  you  have  sold  to  Grant  &  Grant,  on 
account,  total  merchandise,  $23.70.  Open  an 
account  in  your  Ledger  with  the  above  firm. 
Insert  on  the  debit  side  "To  Merchandise, 
$23.70,"  giving  the  year,  month,  and  day; 
also  give  Sales  Book  page  in  Ledger  and 
Ledger  page  in  Sales  Book.  For  form,  see 
Grant  &  Grant's  account  in  this  book,  page  3. 
Post  A.  B.  Pope's  account  on  the  same  prin- 
ciple as  above.  Then  credit  Merchandise  ac- 
count with  the  total  goods  sold  on  time  dur- 
ing the  month,  which  is,  as  shown  by  the 
footings  of  your  Sales  Book,  $383.70.  Insert 
the  Ledger  page  in  Sales  Book  and  Sales 
Book  page  in  the  Ledger.  For  form  of  how 
to  post  this  amount  to  Merchandise  account, 
see  "Merchandise  Account"  in  this  book. 
Ledger  page  2  and  Sales  Book  page  9. 
TAKE   TRIAL   BALANCE. 

After  you  post  Cash  Book,  Journal,  and 
Sales  Book  each  month,  you  take  Trial  Bal- 
ance, which  should  agree  with  printed  Jan- 
uary Trial  Balance  on  page  5  of  this  book. 

HOW   TO   TAKE    A    TRIAL    BALANCE. 

Read  several  times  the  general  instructions 
on  "How  to  Take  a  Trial  Balance,"  page  4  ; 
but  in  this,  the  first  set,  we  will  give  you 
some  special  instructions  in  taking  the  first 
Trial  Balance : 

1.  Go  to  your  Cash  Book  and  you  will  find 
that  the  debit  side  will  foot  up  (provided  you 
have  your  Cash  Book  correct)  $2,225,  and 
the  credit  side  (right-hand  side)  will  foot  up 
$48.  As  we  have  instructed  you  elsewhere, 
the  Cash  Book  is  considered  the  Casli  account 
for  your  Ledger,  and  you  will  find  that  the 
difference  between  the  debit  and  credit  sides 
is  $2,177,  which  you  enter  on  the  debit  side 
of  your  Trial  Balance,  as  per  form  of  Trial 
Balance  on  page  5  of  this  book,  "Jno.  F. 
Draughon  Set,"  January  business. 

2.  Begin  with  the  first  account  in  your 
Ledger,  as  instructed  on  page  4,  under  the 
heading,  "General  Rules  for  Taking  a  Trial 
Balance,"  and  you  will  find  that  Jno.  F. 
Draughon's  Stock  account  shows  a  credit  of 
$2,000 ;  enter  this  on  the  credit  side  of 
your  Trial  Balance,  as  per  page  5,  January 
Trial  Balance,   "Jno.  F.  Draughon   Set." 

3.  You  will  find  that  the  next  account  in 
your  Ledger  (provided  you  have  arranged 
your   Ledger  accounts   as  we   have   them  ar- 


28 


ranged  in  our  printed  book)  is  Merchandise 
account,  and  tliat  tlie  debit  side  of  Merchan- 
dise account  is  $600,  and  that  the  credit 
side  will  foot  up  $608.70.  Now,  you  can 
readily  see  that  the  difference  is  $8.70,  and 
that  the  credit  side  is  $8.70  larger  than  the 
debit  side ;  then  you  must  enter  this  differ- 
ence on  the  credit  side  of  your  Trial  Balance, 
as  per  January  Trial  Balance,  "Jno.  F. 
Draughon  Set,"  page  5.  If  the  debit  side 
of  your  Merchandise  account  had  been  the 
larger,  then  you  would  have  put  that  differ- 
ence on  the  debit  side  of  your  Trial  Balance. 

4.  Now,  proceed  through  your  Ledger,  as 
instructed  on  page  4,  under  the  heading  "Gen- 
eral Rules  for  Taking  a  Trial  Balance,"  writ- 
ing on  the  debit  side  of  your  Trial  Balance 
all  the  accounts  that  show  a  debit  and  on  the 
credit  side  of  your  Trial  Balance  all  the  ac- 
counts that  show  a  credit,  giving  the  amount 
of  the  credit  or  debit,  as  the  case  may  be, 
just  to  the  right  or  left  of  each  account, 
as  per  printed  Trial  Balance,  "Jno.  F. 
Draughon  Set,"  Jan.  31,  page  5. 

5.  After  going  through  your  Ledger  as 
above  directed,  add  both  debit  and  credit 
sides  of  your  Trial  Balance.  If  they  do  not 
agree,  compare  them  with  our  printed  Trial 
Balance,  page  5,  January ;  then  if  you  cannot 
readily  find  your  error,  comply  with  the  rules 
for  locating  errors  in  Trial  Balance,  page  10. 

6.  If  your  January  Trial  Balance  agrees 
with  our  printed  Trial  Balance  for  January, 
page  5,  proceed  to  make  your  entries  for  the 
month  of  February.  Then  post  that  month, 
and  on  Feb.  28  take  another  Trial  Balance, 
which  should  agree  with  our  February  Trial 
Balance,  "Jno.  F.  Draughon  Set,"  page  5. 
If  it  does  not  agree,  make  the  comparison  as 
instructed  in  the  foregoing  article. 

WHEN  YOU  FAIL. 

When  you  cannot  get  your  Trial  Balance, 
read  and  fully  comply  with  instructions  in  ar- 
ticle, page  10,  "A  Few  Rul^s  for  Detecting 
Errors  in  Trial  Balance." 

In  taking  your  February  Trial  Balance, 
bear  in  mind  that  you  include,  in  making  your 
Ledger  footings,  January  business ;  in  fact, 
you  include  the  previous  business  each  month. 

Now  proceed,  following  instructions  closely. 
HOW  TO  BALANCE   CASH  BOOK. 

The  left-hand  side  of  your  Cash  Book  shows 
the  amount  of  cash  received,  which  in  this 
set  is  $2,22  5;  the  right-hand  side  shows  the 
cash  paid  out,  which  is  $48.  (See  our  Cash 
Book,  January  business,  page  6.)  It  looks 
reasonable  that  the  difference  between  the 
two  sides  should  agree  with  the  amount  of 
casli  on  hand.  In  this  case  the  difference  is 
$2,177.  After  this  is  proved,  you  enter  the 
difference,  in  red  ink,  on  the  right-hand  side, 
"By  balance  on  hand,  $2,177,"  which  makes 
the  two  sides  agree.  Then  rule  up  the  two 
sides  and  bring  the  balance  down,  in  black 
ink,  on  the  left-hand  side,  under  the  ruling. 
(See  printed  Cash  Book,  page  6,  left-hand 
side;   balance  brought  down,   $2,177.)      After 


the  first  time  you  balance  Cash  Book,  you 
must  include  the  amount  you  had  on  hand 
the  last  time  you  balanced  it. 

NEXT  MONTH'S  BUSINESS. 

If  your  January  Trial  Balance  agrees  with 

the  one  given  on  page  5  of  this  book,  and  you 

have   complied  with   all   the   foregoing   rules, 

you  are  ready  to  take  up  February  business. 

FEB.    1,    19—. 

Paid  ca-sh  for  store  rent,  $25. 

Note. — Debit  Expense  and  credit  Cash.  For 
form,  see  our  printed  Cash  Book,  page  6,  en- 
try No.  13,  right-hand  side.  For  instructions 
on  "Expense  Account,"  see  page  17 ;  "Cash 
Account,"  page  15. 

Remitted  the  following  cash  on  account 
to  balance  January  account:  Houston, 
Meeks  &  Co.,  check  No.  1;  Wickham  & 
Pendleton,  check  No.  2;  Orr,  Jackson  & 
Co.,  check  No.  3. 

Note. — For  amount  you  owe  them,  see  their 
accounts  in  Ledger.  Read  instructions  below 
on  "How  to  Tell  the  Condition  of  an  Ac- 
count." We  will,  in  this  case,  consider 
checks  cash.  Debit  each  of  the  above  firms 
and  credit  Cash.  See  form  in  Cash  Book, 
page  6,  entries  Nos.  14,  15,  and  16.  Also 
see  comments  on  "Creditors'  Accounts,"  page 
20;  "Cash  Account,"  page  15. 
TO   TELL   CONDITION   OF  AN  ACCOUNT. 

On  the  left-hand  side  of  an  account  you 
enter  all  debits ;  on  the  right-hand  side,  all 
credits.  If  Jones  asks  you  the  condition  of 
his  account,  you  turn  to  his  Ledger  account ; 
and  if  you  find,  for  instance,  that  he  is 
debited  with  $75  and  credited  with  $25,  you 
say:  "Mr.  Jones,  your  account  shows  that 
you  owe  us  $50."  But  first  assure  yourself 
that  all  the  entries  which  would  affect  this 
account  have  been  posted.  Suppose  his  ac- 
count is  debited  with  $25  and  credited 
with  $75,  then  the  account  will  show  that 
you  owe  Mr.  Jones  $50. 

Received  of  Grant  &  Grant,  cash  in  full 
of  account. 

Note. — Debit  Cash  and  credit  Grant  & 
Grant.  For  amount  they  are  due  you,  see 
Grant  &  Grant's  account  in  your  Ledger.  For 
form  of  making  entry,  see  our  printed  Cash 
Book,  page  6,  entry  No.  8.  Also  see  com- 
ments on  "Our  Debtors'  Accounts,"  page  20  ; 
"Cash  Account,"  page  15. 

Mdse.  Cash  sales  this  day,  $50. 

Note. — Debit  Cash  and  credit  Merchan- 
dise. For  form,  see  Casla  Book,  page  6,  en- 
try No.  9,  Also  see  comments  on  "Cash  Ac- 
count," page  15;  "Merchandise  Account," 
page  16.      (Watch  for  errors.) 

Feb.    8.    Bought    on    time    as    follows 

Houston,  Meeks  &  Co.,  bill  2d  inst,  $100 

Wickham  &  Pendleton,  bill  6th  inst.,  $200 

Orr,  Jackson  &  Co.,  bill  8th  inst,  $50. 
Note. — Debit  Merchandise  and  credit  each 


29 


firm.  For  form,  see  Journal,  page  8,  entries 
Nos.  5  to  8 ;  also  see  comments  on  "Our 
Creditors'  Accounts,"  page  20 ;  "Merchan- 
dise Account,"  page  16. 

(1)  Mdse.  Cash  sales,  $10.  (2)  Paid 
cash  for  produce  (butter,  eggs,  etc.,  which 
we  expect  to  sell  again),  $3.  (3)  Paid 
freight  on  mdse.  from  St.  Louis,  $15. 

Note. — The  above  entries  go  In  the  Cash 
Book.  (1).  Credit  Merchandise,  and  debit 
Cash;  (2)  credit  Cash  and  debit  Merchan- 
dise; (3)  debit  Freight  and  credit  Cash.  For 
form,  see  printed  Cash  Book,  page  6,  entries 
Nos.  10,  17,  18.  See  also  comments  on  "Cash 
Account,"  page  15 ;  "Merchandise  Account," 
page   16 ;    "Freight  Account,"  page   17. 

Received  cash  of  A.  B.  Pope,  by  L.  Book- 
er, in  full  of  account. 

Note. — For  amount,  see  Pope's  Ledger  ac- 
count. For  form  for  making  entry,  see  Cash 
Book,  page  6,  ent/y  No.  11;  also  see  com- 
ments on  "Our  Debtors'  Accounts,"  page  20  ; 
"Cash  Account,"  page  15. 

Feb.  15.  Sold  on  time  to  Clay  &  Bass, 
Paris,  Tenn.,  2  lbs.  cheese,  at  25c.  per  lb.; 
10  bbls.  flour,  at  $6  per  bbl. 

Feb.  16.  Sold  on  time  to  Dr.  Dortch, 
Hillsboro,  Tenn.,  1  ham,  20  lbs.,  at  15c. 
per  lb.;  6  bbls.  meal,  at  $3  per  bbl. 

Feb.  20.  Sold  on  time  to  Grant  &  Grant, 
Guthrie,  Ky.,  10  bbls.  flour,  at  $6  per  bbl. 

Note. — The  above  sales  should  be  entered 
In  the  Sales  Book.  For  form,  see  Sales 
Book,  page  9,  entries  Nos.  4,  5,  and  6.  Also 
see  comments  on  "Our  Debtors'  Accounts," 
page  20 ;   "Metchandlse  Account,"  page   16. 

Feb.  28.  Mdse.  Cash  sales,  $20. 

Note. — Debit  Cash  and  credit  Merchan- 
dise, Cash  Book  entry.  For  form,  see  Cash 
Book,  page  6,  entry  No.   12. 

BALANCE. 

Balance  your  Cash  Book.  See  instructions 
on  page  29,  "How  to  Balance  Cash  Book." 
For  form,   see  printed  Cash  Book,   page   6. 

Cash  on  hand  to-day  should  be   $1,997.70; 
Journal   footings,    $350 ;    Sales   Book  footings 
(credit  Merchandise  with  this),    $141.50. 
POST   AND   TAKE   A   TRIAL   BALANCE. 

Your  Trial  Balance  for  February  should 
agree  with  February  Trial  Balance  on  page 
5  of  this  book.  See  instructions  on  "Taking 
a  Trial  Balance,"  pages  4  and  28. 

NEXT  MONTH'S  BUSINESS. 

If  you  have  fully  complied  with  the  fore- 
going, proceed  with  next  month's  business. 

March  1.  (1)  Paid  cash  for  store  rent, 
$25.  (2)  Paid  cash  for  gas,  $2.25.  (3) 
Cash  sales  to-day,  $200. 

Note. — Enter  the  above  in  your  Cash 
Book.  For  (1)  and  (2)  debit  Expense, 
credit    Cash;     (3)     debit    Cash,    credit    Mer- 


chandise. For  form,  see  printed  Cash  Book, 
page  6,  entries  Nos.  27,  28,  and  19.  See 
comments  on  when  to  debit  or  credit  above 
accounts  by  referring  to  Index  to  this  book. 
Do  this  each  time  before  making  entry. 

Remitted  the  following  cash  on  ac- 
count: Houston,  Meeks  &*  Co.,  check  No. 
4;  Wickham  &  Pendleton,  check  No.  5; 
Orr,  Jackson  &  Co.,  check  No.  6. 

Note. — For  amounts  we  are  due  them,  see 
their  accounts  in  Ledger.  Debit  each  of  the 
above  firms  and  credit  Cash.  For  form,  see 
printed  Cash  Book,  page  6,  entries  Nos.  29, 
30,  and  31.  Also  see  comments  on  "Our 
Creditors'  Accounts,"  page  20 ;  "Cash  Ac- 
count," page  15. 

March  6.  Mdse.  Cash  sales,  $20. 

Note. — Debit  Cash  and  credit  Merchan- 
dise. For  form,  see  our  printed  Cash  Book, 
page  6,  entry  No.  20.  Also  see  comments  on 
"Merchandise  Account,"  page  16;  "Cash  Ac- 
count," page  15. 

Sold  on  time  to  A.  B.  Pope,  10  bbls. 
flour,  XXX,  at  $5  per  bbl.;  10  bbls.  meal, 
at  $3  per  bbl. 

March  10.  Sold  on  time  to  Grant  & 
Grant,  Guthrie,  Ky.,  1  bbl.  sugar,  300  lbs., 
at  1V2C.  per  lb.;  1  bbl.  meal,  at  $3. 

Note. — Enter  the  above  in  Sales  Book. 
For  form,  see  printed  Sales  Book,  page  9, 
entries  Nos.  8  and  9.  Also  see  comments  on 
"Our  Debtors'  Accounts,"  page  20 ;  "Mer- 
chandise Account,"  page  16. 

Mdse.  Cash  sales,  $10. 

Note. — Debit  Cash  and  credit  Merchan- 
dise. For  form,  see  printed  Cash  Book,  page 
6,  entry  No.  21.  Also  see  comments  on  "Mer- 
chandise and  Cash  Accounts,"  pages  15,  16. 

Bought  on  time  as  follows:  Houston, 
Meeks  &  Co.,  bill  2d  inst,  $60;  Wickham 
&  Pendleton,  bill  2d  inst.,  $100;  Orr,  Jack- 
son &  Co.,  bill  3d  inst.,  $200. 

Note. — Debit  Merchandise  and  credit  each 
firm.  For  form,  see  printed  Journal,  page 
8,  entries  Nos.  9  to  12.  Also  see  comments 
on  "Our  Creditors'  Accounts,"  page  20  ;  "Mer- 
chandise Account,"  page   16. 

Paid  freight  on  goods  bought  of  Hous- 
ton, Meeks  &  Co.,  $15. 

Note. — Debit  Freight  and  credit  Cash.  For 
form,  see  printed  Cash  Book,  page  6,  entry 
No.  32.  Also  see  comments  on  "Freight  Ac- 
count," page  17  ;  "Cash  Account,"  page  15. 

March  10.  Received  of  the  following,  in 
full  of  accounts:  Dr.  Dortch,  Clay  &  Bass. 

March  12.  Paid  in  full  Grant  &  Grant. 

Note. — For  amounts,  see  their  accounts 
in  Ledger.  Debit  Cash  and  credit  each.  For 
form,  see  our  printed  Cash  Book,  page  6,  en- 
tries Nos.  22,  23,  and  24.  Also  see  comments 
on  "Our  Debtors'  Accounts,"  page  20  ;  "Cash 
Account,"  page   15. 


30 


Mdse.  Cash  sales,  $25. 

Note. — Debit  Cash  and  credit  Merchan- 
dise. For  form,  see  printed  Cash  Book,  page 
6,  entry  No.  25. 

March  31.  Sold  on  time  to  J.  H.  Ste- 
phens, Kennedy,  Ky.,  10  bbls.  flour,  XXX, 
at  $5  per  bbl. 

Sold  on  time  to  Matthews  &  Hood, 
Queen  City,  Texas,  10  bbls.  meal  at  $3  per 
bbl.;  %  case  tomatoes,  3-lb.  cans,  at  $1 
per  case;  2  cases  tomatoes,  2-lb.  cans,  at 
$1  per  case. 

Note. — Enter  in  Sales  Book.  See  printed 
Sales  Book,  page  9,  entries  Nos.  10  and  11. 
Each  of  the  above  is  debited  and  Merchan- 
dise  credited. 

Mdse.  Cash  sales,  $330. 

Note. — Debit  Cash  and  credit  Merchan- 
dise. See  printed  Cash  Book,  page  6,  entry 
No.   26. 

POST   AND   TAKE    TRIAL    BALANCE. 

1.  Balance  Cash  Book,  Journal,  and  Sales 
Book. 

2.  Your  Cash  on  Hand  to-day  should  be 
$2,331.95. 

3.  Your  Journal  footings  for  this  month 
should  be  $360. 

4.  Your  Sales  Book  footings  for  this  month 
should  be  $188.  (Credit  Merchandise  ac- 
count with  time  sales.) 

5.  Post  Cash  Book,  Journal,  and  Sales 
Book  for  March. 

6.  Take  Trial  Balance,  which  should  agree 
with  March  Trial  Balance  on  page  5  of  this 
book.  If  it  does  not  balance,  see  instruc- 
tions on  page  10. 

WE  REPEAT  THAT: 
In  making  entries  in  Journal  or  Cash 
Book  you  should  keep  your  explanatior^s  in 
"explanatory  columns ;"  you  should  never 
run  over  the  ruled  lines  to  the  right  in  ex- 
plaining an  entry,  and  never  let  your  ex- 
planations come  closer  than  two  inches  to  the 
left  margin.  (See  paragraph  9,  page  34.) 
EXPLANATIONS. 
We  stress  the  importance  of  giving  full 
explanations  in  the  "exp"'anatory  columns"  of 
the  Cash  Book  and  Journal.  The  explana- 
tions should  be  so  plain  that  anybody  who 
has  any  knowledge  of  Bookkeeping  at  all,  as 
well  as  an  inexperienced  person,  could,  by 
looking  at  the  entries,  understand  them. 

In  entering  an  article  in  Sales  Book,  give 
full  description  of  it — price  per  pound,  per 
dozen,  per  case,  per  barrel,  etc. ;  the  brand 
of  the  article,  the  date,  etc.  The  entry  should 
be  so  plain  that  if  the  customer  should  or- 
der the  bill  duplicated  it  could  be  done  with- 
out asking  any  question  as  to  the  brand  of 
goods,  etc.  Another  advantage  is,  if  any 
trouble  should  arise  as  to  the  different  arti- 
cles (price,  grade  of  goods,  dates,  etc.),  the 
Sales  Book  would  give  a  full  description. 


NEXT  MONTH'S  BUSINESS. 

If  everything  is  correct  up  to  date,  take 
up   another   month's   business. 

April  1.  Received  cash  of  the  following 
in  full  of  account  for  March:  A.  B.  Pope, 
Grant  &  Grant,  J.  H.  Stephens. 

Note. — For  amounts,  see  their  accounts  in 
your  l5edger.  Debit  Cash  and  credit  each  of 
the  above.  For  form  of  making  the  entries, 
see  printed  Cash  Book,  page  6,  entries  Nos. 
33,   34,  and  35. 

Mdse.  Cash  sales  this  day,  $200. 
Note. — Debit  Cash  and  credit  Merchandise. 
See  Cash  Book,  page  6,  entry  No.  36. 

Paid  cash  for  store  rent,  $25. 

Note. — Debit  Expense  and  credit  Cash. 
See  printed  Cash  Book,  page  6,  entry  No.  40. 

Paid  cash  for  stationery  for  office,  $3. 

Note. — Debit  Expense  and  credit  Cash. 
See  printed  Cash  Book,  page  6,  entry  No.  41. 

Received  of  Matthews  &  Hood,  by  B. 
Cook,  cash  on  account,  $32.50,  less  1  per 
cent  discount. 

Note. — First  debit  Cash  and  credit  Mat- 
thews &  Hood  with  net  amount  cash  you  re- 
ceived of  them ;  then  go  to  your  Journal  and 
debit  Interest  and  Discount  and  credit  Mat- 
thews &  Hood  with  the  discount.  For  form, 
see  printed  Cash  Book,  page  6,  entry  No.  37, 
and  Journal,  page  8,  entry  No.  13,  April 
business.  Also  see  instructions  on  "Interest 
and  Discount  Account,"  page  17;  "Our  Debt- 
ors* Accounts,"  page  20 ;  "Cash  Account," 
page  15. 

Sold  on  time  to  Boyd  Bros.  &  Smith, 
city,  20  bbls.  meal,  at  $3  per  bbl. 

Note. — Enter  in  Sales  Book.  For  form, 
see  printed  Sales  Book,  page  9,  entry  No.  13, 
April  business. 

April  10.  Remitted  cash  on  account  as 
follows:  Houston,  Meeks  &  Co.,  $60;  Wick- 
ham  &  Pendleton,  $100;  Orr,  Jackson  & 
Co.,  $200,  less  2  per  cent  discount. 

Note. — For  Orr,  Jackson  &  Co.'s  entry, 
debit  them  in  your  Cash  Book  with  amount 
of  cash  sent  them ;  then  go  to  Journal  and 
debit  them  with  the  discount,  and  credit  In- 
terest and  Discount.  For  form,  see  printed 
Cash  Book,  page  6,  entry  No.  44,  and  Jour- 
nal, page  8,  entry  No.  14,  April  business. 
Also  see  instructions  on  "Interest  and  Dis- 
count Account,"  page  17;  "Our  Creditors' 
Accounts,"  page  20 ;  "Cash  Account,"  page 
15.  Also  see  Cash  Book,  page  6,  entries  Nos. 
42  and  43,  for  Houston,  Meeks  &  Co.  and 
Wickham  &  Pendleton.  They  are  debited 
and  Cash  credited. 

Mdse.  Cash  sales  this  day,  $336. 

Note. — Debit  Cash  and  credit  Merchan- 
dise. For  form,  see  printed  Cash  Book,  page 
6,  entry  No.  38. 


31 


Paid  cash  for  produce,  $4. 
Note. — "Produce"  means  butter,  eggs,  etc., 
which  we  buy  (usually  from  people  living  in 
the  country)  to  sell  again.  Debit  Merchan- 
dise and  credit  Cash.  For  form,  see  printed 
Cash  Book,  page  6,  entry  No.  45. 

Sold  on  time  to  W.  B.  Cook,  Dallas, 
Texas,  6  dozen  brooms,  No.  2,  at  $1.50  per 
dozen;  6  dozen  brooms,  No.  1,  at  $2  per 
dozen. 

Note. — Enter  in  Sales  Book.  For  form, 
see  printed  Sales  Book,  page  9,  entry  No.  14. 

Received  of  W.  B.  Cook,  his  note,  No.  1, 
at  30  days,  to  be  applied  on  account,  $21. 

Note. — Debit  Bills  Receivable  and  credit 
Cook.  For  form,  see  printed  Journal,  page 
S,  entry  No.  15.  Read  carefully  instructions 
on  "Bills  Receivable  Account,"  page  18  ;  "Our 
Debtors'  Accounts,"  page  20. 

April  30.  Bought  on  time:  Houston, 
Meeks  &  Co.,  bill  2d  inst,  $1,075;  Orr, 
Jackson  &  Co.,  bill  6th  inst.,  $100. 

Note. — Debit  Merchandise  and  credit  the 
above  firms.  For  form,  see  printed  Journal, 
page  8,  entry  No.  16. 

Sent  Orr,  Jackson  &  Co.  our  note.  No.  1, 
at  30  days,  to  be  applied  on  account,  $100. 

Note. — Debit  Orr,  Jackson  &  Co.  and  cred- 
it Bills  Payable.  See  form  in  printed  Jour- 
nal, page  8,  entry  No.  17.  Read  and  study 
instructions  on  "Bills  Payable  Account," 
page  19;  "Our  Creditors'  Accounts,"  page  20. 

Sold  on  time:  Sulphur  Lumber  Co.,  Sul- 
phur, Texas,  20  bbls.  flour,  XXX,  at  $5  per 
bbl.;  1  case  tomatoes,  1-lb.  cans,  at  90c. 

Note. — Debit  Sulphur  Lumber  Co.  and 
credit  Merchandise.  Enter  in  Sales  Book. 
For  form,  see  printed  Sales  Book,  page  9, 
entry  No.   15. 

Mdse.  Cash  sales  to-day,  $26. 

jsjOTE. — Debit  Cash  and  credit  Merchan- 
dise. For  form,  see  printed  Cash  Book,  page 
6,  entry  No.  39. 

Paid  cash,  freight  from  St.  Louis,  $20. 

Note. — Credit  Cash  and  debit  Freight.    For 
form,  see  Cash  Book,  page  6,  entry  No.  46. 
BALANCE   UP. 

1.  Balance  Cash  account.  For  form,  see 
printed  Cash  Book,  page  6,  April  business. 

2.  Your  Cash  Book  should  show  $2,673.63 
cash  on  hand. 

3.  Your  Journal  footings  for  April  should 
be  $1,300.32. 

4.  Your  Sales  Book  footings  for  April 
should  be  $181.90.  (Credit  Merchandise  ac- 
count. ) 

5.  After  you  get  the  above  to  agree,  post 
Cash,  Journal,  and  Sales  Books  for  April. 

6.  Take  April  Trial  Balance,  which  should 
agree  with  the  printed  Trial  Balance,  page 
5:  If  it  does  not  balance,  comply  with  in- 
structions on  page  10. 


NEXT  MONTH'S  BUSINESS. 

If  you  have   succeeded  in  getting  all  your 
footings.    Trial    Balance,    etc.,    to    agree    with 
ours    for    the    month    of   April,    proceed  with 
May  business. 
May  1.  Mdse.  Cash  sales,  $220. 
Xote. — Debit  Cash  and  credit  Merchandise. 
For  form,  see  Cash  Book,  page  7,  entry  48. 
Paid  cash  for  store  rent,  $25. 
Note. — Debit    Expense     and    credit     Cash. 
For    form,    see    printed    Cash    Book,    page    7, 
entry  No.   52,   May  business. 

Sold  on  lime  to  W.  B.  Cook,  20  bbls. 
flour,  XXX,  at  $5  per  bbl.;  1  dozen  brooms. 
No.  2,  at  $1.50  per  dozen. 

Note. — Enter    in    Sales    Book.      For    form, 
see  printed  Sales  Book,  page  10,  entry  No.  17. 
May  10.  Received  of  W.  B.  Cook,  cash 
to  pay  his  note.  No.  1,  $21. 

Note, — Debit  Cash  and  credit  Bills  Re- 
ceivable. For  form,  see  printed  Cash  Book, 
page  7,  entry  No.  49.  Also  see  instructions 
on  "Bills  Receivable  Account,"  page  18  ; 
comments  on  "Cash  Account,"  page  15. 

Remitted  Orr,  Jackson  &  Co.,  cash  to 
pay  our  note.  No.  1,  $100. 

Note. — Debit  Bills  Payable  and  Credit 
Cash.  For  form,  see  printed  Cash  Book, 
page  7,  entry  No.  53,  May  business.  Also 
see  instructions  on  "Bills  Payable  Account," 
page   19  ;    "Cash  Account,"  page   15. 

Sold  on  time  to  W.  B.  Cook,  Dallas,  Tex- 
as, 20  bjls.  flour,  XXX,  at  $5  per  bbl.;  1 
case  blackberries  at  $1  per  case. 

May  15.  Sold  on  time  to  Grant  &  Grant, 
Guthrie,  Ky.,  4  cases  of  gooseberries,  at 
80c.  per  case;  2  cases  strawberries,  at  $1 

per  case. 

Note. — Enter  the  above  in  Sales  Book.  For 
form,  see  printed  Sales  Book,  page  10,  en- 
tries Nos.  18  and  19. 

Mdse.  Cash  sales,  $260. 

Note. — Debit  Cash  and  credit  Merchan- 
dise. For  form,  see  printed  Cash  Book,  page 
7,  entry  No.   50. 

Paid  cash  for  coal  for  office  use,  $6. 

Note. — Debit  Expense  and  credit  Cash. 
For  form,  see  printed  Cash  Book,  page  7, 
entry  No.  54.  Also  see  instructions  on  "Ex- 
pense Account,"  page  17;  "Cash  Account," 
page  15. 

May  30.  Sold  on  time  to  A.  B.  Pope,  4 
cases  salmon,  at  $3.50  per  case;  2  cases 
oysters,  1-lb  cans,  at  $1.20  per  case. 

Note. — Enter  the  above  time  sales  in  Sales 
Book.  For  form,  see  printed  Sales  Book, 
page  10,  entry  No.  20. 

Paid  cash  for  freight  from  St.  Louis, 
$21.    Mdse.  Cash  sales,  $22. 

Note. — Enter    the    above    entries    in    Cash 

32 


Book.     For  form,  see  Cash  Book,  page  7,  en- 
tries Nos.  55  and  51. 

BALANCE  UP. 
Balance  Cash  Book  for  May.  In  business, 
bookkeepers  often  balance  and  rule  up  the 
Cash  Book  every  day.  Cash  should  be  proved 
daily,  even  if  you  do  not  rule  up  Cash 
Book  daily. 

1.  Your  Cash  Book  for  May  should  show 
cash   on  hand,    $3,044.63. 

2.  Your  Sales  Book  footings  should  be 
$224.10.      (Credit   Merchandise   account.) 

3.  After  you  get  your  books  to  agree  with 
the  above,  post  Cash  Book  and  Sales  Book 
for  May.      (No  Journal  entries  May  or  June.) 

4.  Take  May  Trial  Balance,  which  should 
agree  with  May  Trial  Balance  on  page  5. 

NEXT  MONTH'S  BUSINESS. 

If  you  have  fully  complied  with  instruc- 
tions, proceed  with  June  business. 

June  1.  Sold  on  time  to  Grant  &  Grant, 

10  bbls.  flour,  XXX,  at  $5  per  bbl. 

Note. — Enter  in  Sales  Book.  For  form, 
see  printed  Sales  Book,  page   10,  entry  22. 

Mdse.  Cash  sales,  $10. 

Note. — Debit  Cash  and  credit  Merchandise. 
For  form,  see  Cash  Book,  page  7,  entry  56. 

Paid  cash  for  store  rent,  $25. 
Note. — Debit     Expense     and    credit     Cash. 
For  form,  see  Cash  Book,  page  7,  entry  62. 

Received  cash  on  account:  Grant  & 
Grant,  by  J.  E.  Bell,  $5.20;  A.  B.  Pope, 
expressed  currency,  $16.40;  W.  B.  Cook, 
post-office  order,  $101.50, 

Note. — Debit  Cash  and  credit  each  of  the 
above.  For  form,  see  Cash  Book,  page  7, 
entries  Nos.  57,  58,  and  59.  Also  see  com- 
ments on  "Our  Debtors'  Accounts,"  page  20  ; 
"Cash  Account,"  page   15. 

June  10.  Mdse.  Cash  sales,  $260. 

Note. — Debit  Cash  and  credit  Merchan- 
dise.    See  Cash  Book,  page  7,  entry  No.  60. 

June  30.  Sold  on  time  to  Matthews  & 
Hood,  Queen  City,  Texas,  20  bbls.  meal, 
at  $3  per  bbl.;  1  case  corn,  No.  1,  at  $1.25. 

Note. — Enter  in  Sales  Book.  For  form, 
see  printed  Sales  Book,  page  10,  entry  23. 

Paid  cash  for  coal  for  office  use,  $3. 

Note. — Debit  Expense  and  credit  Cash. 
For  form,  see  printed  Cash  Book,  page  7,  en- 
try No.   63. 

Mdse.  Cash  sales,  $30. 

Note. — Debit  Cash  and  credit  Merchan- 
dise. For  form,  see  printed  Cash  Book,  page 
7,  entry  No.  61. 

BALANCE  UP. 

1.  Balance  your  Cash  Book.  For  form, 
see  printed  Cash  Book,  page  7. 

2.  Your  Cash  Book  should  show  $3,439.73 
cash  on  hand. 

3.  Your  Sales  Book  footings  should  be 
$111.25.      (Credit  Merchandise  account.) 


4.  Post. 

>.  Take  June  Trial  Balance,  which  should 
agree  with  printed  Trial  Balance,  page   5. 

6.  Rule    up,    in    Ledger,    all    accounts    that 

balance.       For    form    of   Vuling,    see    printed 

Ledger,    pages    2    and    3.      All    rulings    should 

be  done  in  red  ink,  with  bevel  edge  of  ruler  up. 

DECLARE  PROFITS. 

By  referring  to  page  26,  you  find  "General 
Rules  for  Declaring  Profits;"  but  in  order  to 
assist  you  in  closing  this  set,  we  will  give 
special  Instructions  for  closing  each  account : 

1.  In  business,  to  declare  profits,  you  will 
find  it  necessary  to  take  inventory  of  mer- 
chandise, which,  of  course,  includes  all  mer- 
chandise bought  with  the  view  of  selling.  In 
this  case,  we  will  simply  estimate  the  mer- 
chandise at  $1,000. 

2.  Credit  Merchandise  account,  in  red  ink, 
"By  Inventory,  $1,000."  See  "Merchandise 
Account,"  pages  2,   12. 

3.  Take  the  difference  between  the  debit 
and  credit  sides  of  Merchandise  account,  in- 
cluding your  inventory  on  credit  side,  and 
the  difference  in  favor  of  credit  side  should 
be  $1,992.45. 

4.  Debit  Merchandise  account,  in  red  ink, 
with  this  difference,  $1,992.45,  and  credit 
Profit  and  Loss  account,  "By  Merchandise, 
$1,992.45,"  in  black  ink.  Trace  the  transfer 
of  this  amount,  $1,992.45,  from  Merchandise 
account  to  Profit  and  Loss  account,  as  indi- 
cated by  the  arrow  on  page  2. 

5.  Rule  up  Merchandise  account,  and  bring 
inventory  down  on  the  debit  side.  Amount 
of  inventory,  as  shown  by  your  Merchandise 
account,  is  $1,000.  For  form,  see  "Merchan- 
dise Account,"  page  2  of  this  book. 

6.  By  referring  to  your  June  Trial  Balance, 
you  find  that  Expense  account  shows  a  debit 
of  $167.25.  This  amount  you  close  into  Profit 
and  Loss  account,  as  follows :  Enter  on  the 
credit  side  of  Expense  account,  in  red  ink, 
"By  Profit  and  Loss,  $167.25;"  then  go  to 
your  Profit  and  Loss  account  and  enter  on 
debit  side,  in  black  ink,  "To  Expense,  $167.- 
25,"  giving  the  Ledger  pages  carried  to  and 
brought  from.  For  form,  see  "Expense  Ac- 
count" in  Ledger,  page  2,  and  "Profit  and 
Loss  Account"  in  Ledger,  page  2,  this  book. 
Trace  the  transfer  by  arrow,  as  on  page  2. 

7.  By  referring  to  your  Trial  Balance,  you 
find  that  Freight  account  is  debited  with  $91. 
Transfer  Freight  account  to  Profit  and  Loss 
account,  on  the  same  principle  you  trans- 
ferred Expense  account  to  Profit  and  Loss 
account.     Trace  transfer  by  arrow,  page  2. 

8.  By  again  referring  to  your  Trial  Bal- 
ance, you  find  that  Interest  and  Discount 
account  shows  a  gain  of  $3.68.  Enter  on  the 
debit  side  of  your  Interest  and  Discount  ac- 
count, in  red  ink,  "To  Profit  and  Loss, 
$3.68  ;"  then  go  to  your  Profit  and  Loss  ac- 
count and  enter,  in  black  ink,  "By  Interest 
and  Discount,  $3.68."  Trace  the  transfer  by 
arrows  found  on  page  2. 

9.  Again  rule  up  all  accounts  in  your  Ledg- 


33 


er  that  balance,  then  take  another  Trial  Bal- 
ance, which  should  agree  with  the  follow- 
ing Trial  Balance : 


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Mdse.  (IiiT 
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Matthews 
Boyd  Bros 
W.  B.  Coo 
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READY  TO  CONTINUE  BUSINESS. 

In  actual  business,  you  would  now  be  ready- 
to  continue  business ;  but  as  we  desire  to 
explain  fully  how  to  close  all  accounts,  and 
in  order  that  you  may  work  this  set  over 
several  times,  we  will  have  you  proceed  to 
close  out  all  accounts  in  your  books. 

1.  By  referring  to  your  Trial  Balance,  you 
find  that  Grant  &  Grant  owe  you  $50.  You 
will  suppose  that  they  hand  you  this  amount 
in  cash.  Go  to  the  receiving  side  of  the  Cash 
Book  and  credit  Grant  &  Grant  with  the 
amount.  For  form,  see  Cash  Book,  page  7, 
entry  No.  64.  Dispose  of  the  accounts  of 
W.  B.  Cook,  Boyd  Bros.  &  Smith,  Sulphur 
Lumber  Co.,  and  Matthews  &  Hood  on  the 
same  principle  you  disposed  of  Grant  & 
Grant's  account.     See  entries  Nos.  65  to  68. 

2.  By  again  referring  to  your  Trial  Bal- 
ance, you  find  that  you  owe  Houston,  Meeks 
&  Co.  $1,075,  and  you  will  suppose  that  you 
pay  them  this  amount  in  cash.  Enter  on  the 
credit  side  (right-hand  side)  of  the  Cash 
Book,  "Houston,  Meeks  &  Co.,  $1,075."  See 
Cash  Book,  page  7,  entry  No.  70. 

3.  By  again  referring  to  your  Trial  Bal- 
ance you  find  that  Jno.  F.  Draughon's  net 
gain  (see  "Profit  and  Loss")  is  $1,737.88, 
which  you  will  transfer  to  the  credit  side  of 


his  Stock  account.  Enter  on  the  debit  side  of 
Profit  and  Loss  account,  in  red  ink,  "To  Jno. 
F.  Draughon's  Stock,  $1,737.88;"  then  go  to 
his  Stock  account  and  enter,  in  black  ink, 
"By  Profit  and  Loss,  $1,737.88."  See  his 
Stock  account,  page  2  ;  also  Profit  and  Loss 
account,  page  2.     Trace  transfer  by  arrow. 

4.  You  will  suppose  that  you  sell  the 
amount  of  merchandise  on  hand  to  Phillips, 
Bailey  &  Co.  for  $1,000  'in  cash.  Go  to  the 
receiving  side  of  the  Cash  Book  and  enter, 
"Merchandise,  $1,000."  For  form  of  making 
the  entry,  see  printed  Cash  Book,  page  7, 
entry  No.  69. 

By  referring  to  "Jno.  F.  Draughon's  Stock 
Account"  in  Ledger,  you  find  that  his  net 
capital  is  $3,737.88,  and  you  also  find  that 
you  have  just  enough  cash  to  pay  this  account. - 
Go  to  the  paying-out  side  of  Cash  Book  and 
make  this  entry :  "Jno.  F.  Draughon's  stock 
handed  him,  $3,737.88."  See  Cash  Book, 
page  7,  entry  No.  71. 

Post  your  Cash  Book  entries,  and  all  ac- 
counts in  your  Ledger  should  balance.  Post 
the  debit  side  of  your  Cash  Book  to  the  credit 
side  of  your  Ledger,  and  the  credit  side  of 
Cash  Book  to  debit  side  of  your  Ledger. 

Start  at  the  first  of  this  set  and  work  it 
through  again  and  again,  until  you  can  work 
it  without  referring  to  the  instructions  given 
for  each  entry. 

NOTE  CAREFULLY. 

Before  you  submit  your  work  on 
set  for  inspection,  see  that  you  have 
complied  with  all  the  following  rules  : 

1.  See  that  the  dates  are  correct  in 
the  Ledger  and  books  of  original  entry. 

2.  At  the  end  of  each  Journal  page 
ance  up  and  carry  your  Journal  footings  for- 
ward, if  the  month's  business  requires  more 
than  one  page. 

3.  After  declaring  Profits,  take  Trial  Bal. 

4.  See  that  each  entry  has  been  paged  while 
posting,  and  that  all  accounts  are  ruled  in 
good  style. 

5.  See  that  footings  of  each  Ledger  account 
that  has  been  balanced  are  brought  down  be- 
tween red  lines.  (All  ruled  lines  are  made  in 
red  ink.) 

6.  See  that  the  Trial  Balance  each  month 
is  dated,  that  the  style  of  firm  is  written  at 
the  top  of  Trial  Balance,  and  that  the  Ledger 
page  precedes  each  account  on  Trial  Balance. 

7.  Take  Trial  Balance  after  you  sell  out, 
before  you  close  Profit  and  Loss  account  and 
Stock  account. 

8.  See  that  footings  of  Journal,  Sales,  and 
Cash  on  Hand  agree  with  teacher's  amounts 
each  month ;  also  Expense,  Interest  and  Dis- 
count, Profit  and  Loss,  Bills  Receivable,  Bills 
Payable,  etc. 

9.  See  that  "explanatory  columns"  in  Cash 
Book  and  Journal  are  ruled  two  inches  from 
and  parallel  to  the  date  line. 

10.  See  that  full  explanation  of  each  entry 
is  given  in  Cash  Book,  Journal,  and  Sales 
Book. 


each 
fully 


both 


bal- 


34 


Ledger,  McKINLEY&  BRYAN  SET. 


Dr. 

W.  H.  McKINLEY  STOCK. 

Cr. 

19 

Jan. 

1 

To  Sundries 

+ 

42 

350 
1,655 

00 
00 

19 

Jan. 

1 
1 

By  Sundries 

''^Cash 

1 

40 

1,765 
250 

00 

"  Balance* 

00 

(*red  Ink.) 

ToW.H.McK.p.act. 
"  Cash 

2,015 

00 

By  bal.(p8.  worth) 
"  P.  and  L 

2,015 

00 

19 

Apr. 

1 

L.P.37 
41 

25 
1,725 
1,750 

25 

21 
46 

19 

Apr. 

1 
1 

L.P.35 
J.  43 

1,665 

85 

00 
46 

1,750 

46 

W 

.  J.  BRYAN  STOCK„ 

19 

Apr. 

1 

ToW.J.B.  pri.act. 
"  Cash 

L.P.35 
41 

25 
1,725 

25 
20 

1  19 

<ian. 
Apr. 

1 
1 

By  Cash 

40 
J.  43 

1,665 
85 

00 

'^  P.  and  L    

45 

1,750 

45 

1,750 

45 

PROFIT  ANi>  LOSS. 


19 

Apr. 

1 
1 
1 

To  Expense 

"  Int.  and  Dis 

"  Freight 

"  Sundf.  Stock 

L.P.35 
L.P.36 
L.P.36 
J.  43 

273 
2 
68 
170 
514 

00 
59 
00 
91 
50 

19 

Apr. 

1 

By  Mdse 

«  Stocks&Bonds 

L.P.35 
L.P.36 

509 
5 

50 
00 

514 

50 

(Bought.) 

MERCHANDISE. 

{Sold.) 

19 

Jan. 

1 
2 
4 
1 

14 

14 

30 

1 

To  McK.  stock 

"  Cash 

"  Sundries 

42 
40 
42 
42 
42 
42 
43 
l.p.35 

1,500 

1,680 

40 

20 

320 

1,690 

509 

00 
00 
00 
00 
00 
00 
00 
50 

19...... 

Jan. 

Feb. 
Mar. 

Apr. 

6 

8 

12 

31 

81 

1 

4 

14 

28 

1 

5 

15 

30 

30 

1 

By  H.,  M.  &  Co... 
''  Cash 

42 
40 
40 
40 
44 
40 
40 
40 
44 
40 
40 
40 
40 
44 

10 

40 

30 

160 

339 

50 

240 

936 

583 

250 

450 

85 

120 

1,071 

1,400 

5,764 

00 
00 

li      tt 

00 

Feb, 

"  Bills  Rec. 

00 

'*  John  Jones 

"  Time  Sales 

«  Cash 

00 

00 

Mar. 

li         n 

u      4°    

00 

Apr. 

"  P.  and  L.* 

(*red  Ink.) 

To  Inventory 

"  Time  Sales 

"  Cash 

00 
50 
00 

u        u 

00 

U            (( 

00 

((         u 

00 

"  Time  Sales 

"  Inventory* 

(*red  Ink.) 

By  Cash 

00 
00 

5,764 

50 

50 

19 

Apr. 

1 

1,400 

00 

19...... 

Apr. 

1 

41 

1,400 

00 

' 

1 

EXPENSE. 


To  Cash 

It      K 

"     "  !!!!!!....!.!!!!!. 

"  Tom  Watson,  bk 
"  Cash 

"     "   !-!!!!!.'.'."!! 

*'  Tom  Watson,  bk 
"  Cash 


19 

40 

50 

00 

Jan. 

11 

40 

2 

00 

Apr. 

1 

40 

10 

00 

42 

50 

00 

40 

50 

00 

40 

10 

00 

40 

2 

00 

40 

4 

00 

42 

50 

00 

40 

10 

00 

40 

5 

00 

40 

6 

00 

40 

25 

00 

274 

00 

By  Cash , 

''^  P.  and  L.*.. 
(*red  ink.) 


40 
l.p.35 


1 
273 


274 


f  Column  for  page  of  book  posted  from.  L.  P.,  Ledger  page  posted  to  or  posted  from. 

Notice, — All  ruling  by  students  must  be  done  with  red  ink.  In  using  black-face 
type  in  table  matter,  such  as  "April  1 .  By  Inventory,  $1 ,400,"  we  want  to  impress 
upon  the  student  that  such  entries  should  be  made  in  red  ink. 

36  . 


Ledger,  McKINLEY  &  BRYAN  SET. 


Dr. 

INTEREST 

AND  DISCOUNT. 

Cr. 

19 

Feb. 

1 
5 

To  Bills  Rec 

f 

42 
43 

5 
5 

00 
49 

19 

Feb. 

Mar. 

Apr. 

4 
15 

30 

1 

By  G.  B.  Gro.  Co. 
''  H.,  M.  &  Co... 
''  G.  B.  Gro.  Co. 
"   Sunds 

+ 
42 
43 
43 
43 
l.p.35 

4 

1 
2 

2 

10 

20 

Mar. 

''  John  Smith 

20 
00 
FiO 

"   P.  and  L*........ 

(*red  Ink.) 

59 

10 

49 

49 

FREIGHT. 

19 

Jan. 

4 

1 

To  Cash 

40 
40 

60 
8 

00 
00 

19 

Apr. 

1 

By  P.  and  L.* 

(*red  ink.) 

l.p.35 

68 

00 

Mar. 

U           ii 

68 

00 

68 

00 

STOCKS  AND  BONDS. 


19 

Jan. 
Feb. 

1 
4 
1 

To  1  Shi-  C.S.B.  stk.. 
''        "    C.S.B.  stk.. 

"  P.  and  L* 

(*red  ink.) 

To  Inventory 

J.  42 
J.  42 
l.p.35 

110 

110 

5 

00 
00 
00 

19 

Feb. 

Apr. 

4 

1 

BylshrCS.B.stk 
(sold) 

J.  42 

115 
110 

00 

Apr. 

nn 

(*red  Ink.) 

BylshrCS.B.stk 
(sold) 

- 

225 

00 

225 

00 

19 

Apr. 

1 

no 

00 

19 

Apr. 

1 

C.41 

110 

00 

TOM  WATSON,  BOOKKEEPER. 


19 

31 
1 

To  Cash 

40 
41 

25 

75 

00 
00 

19 

Jan. 
Feb. 

31 

28 

By  Jan.  Salary.... 
"  Feb.  Salary.... 

J.  42 
J.  42 

50 
50 

00 

Apr. 

u         u 

00 

100 

UO 

100 

00 

BILLS  RECEIVABLE. 


19 

1 
4 

J.  42 
J.  42 

50 
10 

00 
00 

00 

]9 

Feb. 

Apr. 

1 

1 
1 

By  J.  Jones 

C.40 
J.  42 
C.41 

5 
45 
10 

00 

Feb. 

"  B.  Harrison 

00 

"   B.  Harrison.... 

00 

60 

60 

00 

BILLS  PAYABLE. 


19 

Mar. 

20 

ToH.,M.  &Co 

J.  43 

60 

00 

19 

Mar. 

1 

By  H.,  M.  &  Co... 

J.  43 

60 

00 

1 

FIRST  NATIONAL  BANK, 

NASHVILLE. 

-19.:.... 

Mar. 

1 

To  Cash .. 

40 

75 

00 

19 

Mar. 
Apr. 

20 

1 

By  Bills  Pay 

"   Cash 

J.  43 

41 

60 
15 

00 

00 

75 

00 

75 

00 

JOHN  N.  STEWART. 


19 

1 

14 
15 

J.  42 
44 

44 
44 

50 

75 

6 

30 

00 
00' 
10 
00 

19 

Mar. 
Apr. 

5 

1 

By  Cash 

4(? 
41 

6 

155 

10 

"  Mdse 

00 

Feb. 

H           il 

Mar. 

((       (( 

161 

10 

161 

10 

J.  Posted  from  Journal  page.       0.  Posted  from  Cash  Book  page. 

36 


L.  P.  Ledger  page. 


Ledger,  McKINLEY  &  BRYAN  SET. 


Dr. 

A. 

M. 

PIKE. 

Ck. 

19 

Jan. 

1 
9 

To  (old  business).... 
"  Mdse 

T 

J.  42 

44 

25 
21 

00 
00 

19 

Jan. 
Feb. 

12 
14 
14 

By  H.,M.  &Co... 

"   Cash 

T 
42 
40 
42 

25 
20 

1 

00 
00 

"  John  Jones 

oo 

46 

00 

46 

00 

JOHN  SMITH,  127  NORTH  HIGH  STREET. 

19 

Jan. 

1 
31 
28 
20 

To  (old  business).... 
'^  Mdse 

J.  42 

44 
44 
44 

30 
243 

31. 
840 

00 
00 
40 
nn 

19 

Mar. 

Apr. 

15 

1 

By  Cash 

40 
43 
41 

268 

5 

870 

91 

''   Int.  and  Dis... 
"  Cash 

49 

Feb. 

u           u 

00 

Mar. 

(I         il 

1,144 

40 

1,144 

40 

1 

W.  H.  McKINLEY,  PRIVATE  ACCOUNT. 


19 

Feb. 

1 
80 

To  Cash 

40 
43 

25 

00 
25 

19 

Apr. 

1 

By  W.H.McK.Stk.*. 
('■red  ink.) 

I.p.35 

25 

25 

Mar. 

"   Int.  and  Dis 

25 

25 

25 

25 

W.  J.  BRYAN, 

PRIVATE  ACCOUNT. 

19 

Feb. 

1 
SO 

To  Cash 

40 
43 

25 

00 
25 

19 

Apr. 

1 

ByW.  J.  B.  Stk.*... 
(■red  ink.) 

i.p.35 

25 

OR 

Mar. 

"  Int.  and  Dis 

25 

25 

25 

25 

JOHN  JONES. 


19 

Feb. 


To  Cash 

'^  A.  M.  Pike 
-'  Mdse 


19 

40 

9 

00 

Feb. 

14 

42 

1 

00 

44 

10 

00 

20 

00 

Mdse. 


42 


GROVER  CLEVELAND. 

19 

Feb. 

4 

To  Mdse 

44 

230 

00 

19 

Feb. 
Apr. 

4 

1 

By  Sunds.. 

42 
41 

120 
110 

00 

"   Cash 

00 

230 

00 

230 

00 

T.  C.  SKEEN. 

19 

Feb. 

16 
30 

To  Mdse 

44 
44 

306 
201 

00 

00 

19 

Mar. 
Apr. 

30 

1 

By  Cash 

40 
41 

306 
201 

00 

Mar. 

hi       it 

00 

507 

00 

507 

00 

CLOSING   BOOKS. 

As  stated  elsewhere,  business  firms  usually  declare  profits  once  each  year,  if  not 
semiannually,  while  some  declare  profits  monthly.  To  do  this  it  is  not  necessary,  if  your 
books  have  been  kept  "Double  Entry,"  to  make  entries  to  all  of  your  different  accounts, 
such  as  Customers,  Bills  Receivable,  etc.,  unless  you  consider  some  of  those  accounts 
worthless.  Such  accounts  as  are  affected  in  declaring  profits  are  those  which  make  the 
proprietor  worth  more  or  less.  For  explanation  on  declaring  profits,  which  we  call 
closing  our  books,  see  page  26. 


37 


Ledger,  McKINLEY  &  BRYAN  SET. 


HOUSTON,  MEEKS  &  CO.,  ST.  LOUIS,  MO. 

Jan. 

6 

12 

1 

4 

1 
15 

1 

To  Mdse. 

42 
42 
40 
42 
43 
40 
43 
41 

10 
25 

350 

115 
60 

118 
1 

670 

00 
00 
00 
00 
00 
80 
20 
00 

19 

Jan. 

Feb. 
Mar. 

1 

1 

3 

8 

By  (old  business). 
"  Mdse.  (bill 28th 

ult.) ...  . 

"  Mdse 

J.  42 

42 
42 
42 

200 

360 
120 
670 

00 

FeB. 

"  A.  M.  Pike. 

"  Cash 

00 

''  Stocks  &  Bonds. 
"  Bills  Pay 

00 

Mar. 

i(       ii 

00 

"  Cash 

^^ 

Apr. 

"  Int.  and  Dis 

"  Cash 

1,350 

00 

1,3.50 

00 

1 

ORR,  JACKSON  &  CO.,  NASHVILLE,  TENN. 


19 

Apr. 


To  Cash 41 


19. 


150     00       Jan.         1       By  (old  business).  J.  42 


00 


GREELEY-B.  GRO.  CO.,  ST.  LOUIS,  MO. 


19 

Feb. 

4 

4 

Mar. 

15 

Apr. 

1 

To  Cash 

"  Int.  and  Dis. 

"  Cash 

"  Int.  and  Uis. 
"  Cash 


19 

40 

415 

80 

Jan. 

1 

42 

4 

20 

Feb. 

12 

40 

198 

00 

Mar. 

12 

43 

2 

00 

41 

390 

00 

1,010 

00 

By  Mdse. 


390 


WICKHAM  &  PENDLETON,  ST.  LOUIS,  MO. 

19 

Feb. 

14 

1 

To  Cash 

4t                H 

40 
41 

600 
630 

00 
00 

19 

Jan. 
Mar. 

3 
22 

By  Mdse 

42 
43 

600 
630 

00 

Apr. 

«          n. 

00 

1,230 

00 

1,230 

00 

JOHN  L  ADAMS  &  CO.,  NEW  ORLEANS,  LA. 

19 

Mar. 

30 

To  Cash 

40 

300 

00 

19 

Jan. 

3 

By  Mdse 

42 

300 

00 

(Form  of  check  drawn  by  McKinley  &  Bryan,  favor  Houston,  Meeks  &  Co.) 
J^o.  2it9.  /fa^h-ville,  Tenru,  jam,.  6,  19....... 

FIRST   NATIONAL   BKNK 

Tray  to /. ^ /.. or  order ^ 

:^>» 50.50  ^^pJimi^  9p  y^l^ 

(let  ^. 
38 


TRIAL   BALANCE   BOOK. 


TRIAL  BALANCE,  McKINLEY  &  BRYAN,  JANUARY  1,  19.... 

Dr. 

Cr. 

L.  P. 

Cash  (from  Casli  Book) 

1,915 
1,500 
110 
50 
50 
25 
30 

00 
00 
00 
00 
00 
00 
00 

L.  P. 

35 

35 

38 
38 

W.  H.  McKinley,  stock 

1,665 

1,665 

200 

150 

no 

35 

Merchandise 

00 

36 

Stocks  and  Bomls 

Houston,  M    &  Co 

00 

3(5 

Bills  Receivable 

00 

36 

37 

A.  M.  Pike 

37 

John  Smith 

3,680 

00 

3,680 

00 

TRIAL  BALANCE,  McKINLEY  &  BRYAN,  JANUARY  31,  19. 


Cash 

Merchandise 

Expense 

Freiglit 

Stocks  and  Bonds 
Bills  Receivable.. 

J.  N.  Stewart 

A.M.  Pike 

John  Smith 


1,994 

00 

35 

2,606 

00 

35 

111 

00 

36 

60 

00 

38 

110 

00 

38 

50 

00 

38 

125 

00 

88 

21 

00 

38 

273 

00 

5,350 

00 

W.  H.  McKinley,  stock.... 

W.  J.  Bryan,  stock 

Tom  Watson,  bookkeeper 

Houston,  MeeUs  &  Co 

Orr,  Jackson  &  Co 

Greeley-B.  Grocery  Co.... 
Wickham  &  Pendleton.... 
John  I.  Adams  &  Co 


TRIAL  BALANCE,  McKINLEY  &  BRYAN,  FEBRUARY  38,  19. 


Cash 

Merchandise 

Expense 

Interest  and  Discount 

Freight - 

Stocks  and  Bonds 

Bills  Receivable 

John  N.  Stewart 

John  Smith 

W.  H.  McKinley,Private  account. 

W.  J.  Bryan,  Private  account 

G  rover  Cleveland 

T.  C.  Skeen 


1,7.54 

20 

35 

1,176 

50 

35 

227 

00 

36 

80 

38 

60 

00 

38 

105 

00 

38 

10 

00 

38 

131 

10 

304 

40 

25 

rx) 

25 

00 

110 

00 

306 

00 

4,235 

00 

W.  H.  McKinley,  stock.... 

W.  J.  Bryan,  stock 

Tom  Watson,  bookkeeper 

Houston,  Meeks  &  Co 

Orr,  Jackson  &  Co 

Greeley-B.  Grocei-y  Co.... 
John  I.  Adams  &  Co 


TRIAL  BALANCE,  McKINLEY  &  BRYAN,  MARCH  30,  19.... 

Cash , 

2,494 

890 

273 

2 

68 

105 

870 

10 

15 

155. 

25 

25 

110 

201 

41 
50 
00 
59 
00 
00 
00 
00 
00 
00 
25 
25 
00 
00 

35 
35 
36 

38 
38 
38 
88 

W.  H  McKinlev  stock 

1,665 
1,665 
75 
670 
150 
390 
630 

00 

35 

Merchandise 

W.  J.  Bryan,  stock. 

35 

Expense '. 

Tom  Watson,  bookkeeper...!....... 

00 

36 

Interest  and  Discount 

00 

36 

Freight 

OiT  Jackson  &  Co 

00 

36 

Stocks  and  Bonds 

00 

37 

Wickham  &  Pendleton 

Bills  Receivable 

36 
36 

First  National  Bank 

J.  N.  Stewart 

37 

37 
37 

W.  H.  McKinley,  Private  account. 

W.  J.  Bryan,  Private  account 

Grover  Cleveland 

37 

T.  C.  Skeen 

5,245 

00 

5,245 

00 

TRIAL  BALANCE,  McKINLEY  &  BRYAN,  APRIL  1,  19. 


Cash 

Merchandise 

Stocks  and  Bonds 

Bills  Receivable 

First  National  Bank 

J.  N.  Stewart 

John  Smith 

W.  H.  McKinley, Private  account 

W.  J.  Bryan,  Private  account 

Grover  Cleveland 

T.  C.  Skeen 


2,494 

41 

35 

1,400 

00 

35 

110 

00 

35 

10 

00 

36 

15 

00 

38 

155 

00 

38 

870 

00 

38 

25 

25 

38 

25 

25 

110 

00 

201 

00 

5,415 

91 

W.  H.  McKinley,  stock 

W.  J.  Bryan,  stock 

Profit  and  Loss 

Tom  Watson,  bookkeeper 

Houston,  Meeks  &  Co 

Orr,  Jackson  &  Co 

Greeley-B.  Grocery  Co. 

Wickham  &  Pendleton 


39 


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II                            1 

1                                 1 

q;iS^5;^^5§3 

^^i?ofe?s§g 

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:o«  :   :    i  :   :■« 

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too  -•  fl 

fi  o  o5 S.5 


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W»!fi»»»»!Jilfiiffi»!ii!fi»>fUli!fiili!fi»lii!fi!fi!iiW»!fi!fi 


41 


Journal, McKINLEY& BRYAN  SET. 


JANUARY,  19.... 


O  C 

Explanatory  Column. 

II 

r 

Dr. 

Cr. 

1 

1 

1 

Sundries... To: 

(Part  of  McKinley's  Investment.) 

W.  H.  McKinlev's  Stock 

35 
35 
36 
36 
87 
37 
36 

35 
38 
88 

1,500 
50 
50 
25 
30 
110 

350 

2,115 

00 
00 
00 
00 
00 
00 

00 
00 

1,765 

150 

200 

2,115 

00 

Bills  Receivable     

J .  Jones's  note,  dated  Dec.  24, 19...,  30  daj  s. 

A.  M.  Pike 

11      4(     (.k             :: 

John  Smith 

a       li      w               11 

Stocks  and  Bonds 

1  share  C.  S.  Bank  Stock  on  hand 

?, 

W.H.McKinleyStock.To: 
Orr,  Jackson  &  Co 

(New  firm  assumes  old  accounts.) 
Sundries 

00 

Houston,  Meeks  &  Co 

n      "    n        tt 

00 

00 

JANUARY,  19.... 


B 

4 

6 
12 
31 

Merchandise ..To: 

Houston,  Meeks  &  Co 

Greeley-B.  Grocery  Co.... 
Wickham  &  Pendleton... 
John  1.  Adams  &  Co 

Houston,  Meeks  &  C0..T0: 
Merchandise 

Sundries 

35 

38 
38 
38 
38 

38 
35 

38 
37 

35 
36 

1,680 

10 
25 

50 

00 

00 
00 
00 

360 
420 
600 
300 

10 

25 

50 

Bill  28th  ult 

00 

"    1st  inst 

00 

"    3d    "    

00 

4(        H          ti 

00 

4 

Returned  to  them  2  bbls.  flour,  @  |5  each.. 
Sent  H.,  M.  &  Co.  draft  on  Pike 

00 

5 

Houston,  Meeks  &  C0..T0: 
A.  M.  Pike 

00 

6 

Expense To: 

Tom  Watson,  bookkeeper 

1  month's  salary. 

00 

1,765 

00 

1,765 

00 

FEBRUARY,  19. 


Sundries To: 

Merchandise 

Interest  and  Discount 

Houston,  Meeks  &  C0..T0: 
Stocks  and  Bonds 

Sundries To: 

Bills  Receivable 

Stoclcs  and  Bonds 

Greeley-B.  Gro.  Co To: 

Interest  and  Discount 

Merchandise To: 

John  Jones , 

John  Jones To: 

A.  M.  Pike 

Merchandise To: 

Houston,  Meeks  &  Co 

Greeley-B.  Grocery  Co  . 

Expense. 

Tom  Watson,  bookkeeper 


Bills  Receivable 

c  Sold  John  Jones's  note  to  H.,  M.  &  Co.  ) 
<  at  $5  discount,  and  received  in  pay-  > 
(     ment  cash  $5,  balance  in  merchandise  ) 

Sold  to  H.,  M.  &  Co.on  act.  1  sh.C.S.bk.stk, 

Grover  Cleveland , 

Harrison  order  from  C 

1  sh.  C.  S.  Bank  Stock  from  C 

1  per  cent  discount  on  |420 

Received  butter  and  eggs  of  him 

Transferred  as  requested  by  Jones 

Sundries 

Bill  3d  inst 

"    12th  " 

1  month's  salary 


42 


40  00 
5  00 


115 

10 
110 

4 

20 

1 

320 

50 


675  20 


50 


00 


00 


20 


Journal,  McKINLEY  &  BRYAN  SET. 


MARCH,  19.... 


Explanatory  Column. 

<u  be 

■3C., 

Dr. 

Ck. 

15 

1 
15 
15 
15 
20 
80 

30 

Houston,  Meeks  &  C0..T0: 
Bills  Payable 

Gave  our  note  to  H.,  M.  &  Co.  on  acct 

2  per  cent  discount  on  $274.40.    See  C.  B.... 

1  per  cent  discount  on  8120.    See  C.  B 

1  per  cent  discount  on  $200.    See  C.  B 

Sent  check  to  H.,  M.  &  Co.  to  pay  note 

38 
36 

36 
37 

38 
36 

38 
36 

36 
36 

35 
38 
38 
88 

36 
37 
37 

60 
5 
1 
2 

60 
1,690 

00 
49 
20 
00 
00 
00 

25 
25 

60 
5 
1 
2 

60 

670 
390 
630 

00 

16 

Interest  and  Discownt.To: 

49 

17 

18 
19 

Houston,  Meeks  &  C0..T0: 
Interest  and  Discount 

Greeley-B.  Gro.  Co To: 

Interest  and  Discount 

Bills  Payable To: 

First  National  Bank 

Merchandise To: 

Houston,  Meeks  &  Co 

Greeley-B.  Gmcei-y  Co ... 
Wickham  &  Pendleton... 

Sundries To: 

W.  H.  McKinley,  pri.  act. 
W.  J.  Bryan,          "      " 

20 
00 
00 

Bill  8th  inst 

on 

"    12th   "                    

00 

«   22d     "   

00 

21 

Interest  and  Discount 

50 

g       t»           "                     't                 M         »t 

1,819 

19 

1,819 

19 

APRIL,  19  ... 

(Transferring  P.  and  L.  to  Stock  acct.) 

Sundiies 

^  net  gain 


22 


Profit  and  Loss To: 

W.  H.  McKinley,  stk.  act. 
W.  J.  Bryan,  stock  act... 


170 


170 


91 


170 


91 


INSTRUCTIONS  BY  MAIL. 

Satisfaction  Guaranteed. 

A  PERSON  who  purchases  a  copy  of  this  book  and  has  no  opportunity  to  receive 
personal  instruction  should  correspond  with  Draughon's  Practical  Business  Col- 
lege Company,  Nashville,  Tenn.,  Department  H.  S.,  with  a  view  of  completing  the  course 
by  mail.  Draughon's  Company  will  furnish  all  the  additional  instructions  necessary, 
supply  all  stationery,  such  as  blank  books,  pens,  rules,  drafts,  checks,  notes,  etc.,  at 
a  nominal  cost,  and  criticise  the  work  as  many  times  as  necessary,  and,  if  the  course 
is  satisfactorily  completed,  a  certificate  of  proficiency  will  be  given. 

We  manufacture  our  blank  books,  using  light-weight  covers  so  as  to  save  postage. 
We  furnish  these  books  with  a  Home-Study  Course  or  sell  them  separately. 

Write  for  prices.  If  you  own  a  copy  of  Draughon's  Practical  Bookkeeping  Illus- 
trated, please  state  that  fact  when  you  write  for  terms,  etc. 


43 


Sales  Book, 
MoKINLEY  &   BRYAN   SET. 


JANUARY,  19.. 


1 

36 

87 
37 
35 

John  N.  Stewart,  City— 
10  bbls.  flour,  XXX,  @  $6.00 

1 

60 
15 

21 

240 
3 

00 
00 

00 

00 
00 

75 

21 
243 

00 

5  bbls.  meal,  @  $3.00 

2 

[9] 
A.  M.  Pike,  Springfield,  Tenn.— 
Ibbl.  G.  sugar,  300  lbs.,  @  7c 

00 

8 

[311 
John  Smith,  City— 
40  bbls.  XXX  flour,  @  86.00 

00 

50  lbs.  lard,  @  Gc 

Mdse.  Cr.  this  month,  total  time  sales 

4 

339 

to 

339 

00 

FEBRUARY,  19. 


5 

87 

6 

37 

7 

36 

8 

37 

9 

87 

iL 

35 

G.  Cleveland,  Washington,  D.  C. 

30  bbls.  Star  flour,  @  S6.00 

500  lbs.  bacon,  @  10c 


[i] 


John  Jones — 
2  bbls.  flour,  @  $5.00.. 

Joiin  X.  Stewart,  City- 
10  lbs.  cofl*ee,  @  25c..., 
1  ham,  18  lbs.,  @  20c.. 


[1*] 


T.  C.  Skeen— 
50  bbls.  flour,  XXX,  @  |6.00. 
1  case  butter,  30  lbs.,  @  20c... 


[16] 


[28-3 
John  Smith,  127  North  High  Street— 

10  bbls.  meal,  @  $3.00 

20  lbs.  G.  sugar,  @  7c , 

Mdse.  Cr.  this  month,  total  time  sales- 


ISO 
50 


300 
6 


588 


MARCH,  19. 


11 

86 
37 

37 
35 

John  N.  Stewart — 
5  bbls  flour,  @  86.00 

[15] 

80 

240 
600 

21 
180 

00 

00 
00 

00 
00 

30 
840 

201 
1.071 

00 

12 

John  Smith — 
40  bbls.  flour,  @  S6.00 

[20] 

00 

200  bbls.  meal,  @  $3.00. .                                               

13 

T.  C.  Skeen— 
300  11)8.  G.  sugar.  @  7c 

[30] 

OO 

30  bbls.  flour,  @  §6.00 

14 

Mdse.  Or.,  total  time  sales 

1,071 

CO 

"ofT 



44 


MEMORANDUM  ENTRIES. 

Mckinley  &  bryan  set. 


AGREEMENT. 
Nashville,  Tenn.,  Jan.  1,  19 — . 

WE,  William  H.  McKinley  and  Wil- 
liam Jennings  Bryan,  have  this 
day  formed  a  copartnership,  under  the  firm 
name  and  style  McKinley  &  Bryan,  to  do 
a  general  mercantile  business,  to  share  in 
losses  and  gains,  according  to  the  amount 
each  invests.  The  business  shall  be  con- 
ducted in  the  city  of  Nashville,  county  of 
Davidson,  State  of  Tennessee,  for  a  term 
cf  two  years,  during  which  time  neither 
member  of  the  firm  shall  draw  out  of  the 
business,  for  private  use,  more  than  $75 
per  month,  and  6  per  cent  interest  shall 
be  charged  on  such  amount  drawn  out. 
Each  member  of  the  firm  shall  devote  his 
entire  time  to  the  business,  but  neither  is 
to  receive  any  salary.  We  have  this  day 
employed  Tom  Watson,  cf  Georgia,  as 
bookkeeper  for  a  period  of  three  months, 
at  a  salary  of  $50  per  month. 

[Signed]     William  H.  McKinley, 

William  Jennings  Bryan. 

Note. — After  you  read  the  entries  referred 
to  by  numbers,  in  order  to  get  the  correct 
form  for  malcing  the  entry  in  your  books, 
then  refer  to  tlie  Index  found  in  the  back  of 
the  book,  which  will  cite  you  in  most  cases 
to  some  explanation  on  accounts  that  should 
be  debited  or  credited.  As  an  example,  we 
tell  you  to  debit  Bills  Receivable  and  credit 
Merchandise.  Turn  to  the  Index  and  locate 
the  explanation  on  "Merchandise  Account" 
and  "Bills  Receivable  Account ;"  then  read 
the  explanation  before  and  after  making  the 
entry.  Do  this  in  every  case  where  you  do 
not  fully  understand  the  entry.  It  will  be 
•profitable  for  you  to  heed  this  advice,  even 
after  you  think  you  fully  understand  the  en- 
try. 

INVESTMENTS. 

The  following  investments  have  this 
day  been  made: 

William  H.  McKinley,  who  has  been  in 
the  mercantile  business  in  Gallatin,  Tenn., 
has  this  day  moved  his  stock  of  goods, 
open  accounts,  etc.,  to  Nashville,  Tenn., 
and  invested  in  the  new  business.  The 
amounts  and  different  articles  of  old  busi- 


ness invested  in  the  new  business  by  Mc- 
Kinley are  as  follows:  (1)  Cash,  $250;  (2) 
Merchandise  moved  from  Gallatin,  Tenn., 
to  Nashville,  and  accepted  by  the  new 
firm  at  $1,500;  (3)  Note  on  John  Jones  at 
thirty  days,  dated  December  24,  last  past, 
$50.  The  following  open  accounts  due 
McKinley  invested  in  the  new  business: 
(4)  John  N.  Stewart,  $50;  (5)  A.  M. 
Pike,  $25;  (6)  John  Smith,  $30.  (7) 
McKinley  owns  one  share  of  City  Savings 
Bank  stock,  which  is  also  accepted  in 
the  new  business  at  $110.  (8)  McKinley 
owes  on  the  old  business  which  is  as- 
sumed by  McKinley  &  Bryan  as  follows: 
To  Orr,  Jackson  &  Co.,  Wholesale  Grocers, 
Nashville,  Tenn.,  $150;  Houston,  Meeks 
&  Co.,  Wholesale  Grocers,  St.  Louis,  Mo., 
$200.  (9)  William  Jennings  Bryan  in- 
vests cash  in  the  new  business,  $1,665. 

Note. — See  instructions  on  "Stock  Ac- 
count," page  15  ;  then  arrange  the  foregoing 
entries  on  books  of  original  entry ;  post  and 
take  Trial  Balance,  which  should  agree  with 
Trial  Balance  on  page  39.  For  instructions 
on  "Posting"  and  "Taking  Trial  Balance," 
see  pages  4  and  28.  Balance  your  Cash 
Book.  For  form,  see  our  printed  Cash  Book, 
page  40.     Read  the  following: 

HOW  TO  DISPOSE   OF  THE   FOREGOING 

ENTRIES. 

For  first  entry,  debit  Cash  and  credit  Mc- 
Kinley's  Stock  account,  $250.  For  form  of 
making  the  entry,  see  our  printed  Cash  Book, 
page  40,  entry  No.  1.  Read  instructions  on 
"Stock  Account,"  page  15,  and  "Cash  Ac- 
count," page  15. 

Credit  McKinley's  Stock  account  in  Jour- 
nal, and  debit  as  follows :  For  No.  2,  debit 
Merchandise ;  for  No.  3,  debit  Bills  Receiva- 
ble;  for  Nos.  4,  5,  and  6,  debit  Stewart,  Pike, 
and  Smith,  each.  For  form  of  making  en- 
tries, see  our  Journal,  page  42,  entry  No.  1. 
Read  instructions  on  the  foregoing  accounts 
on  pages  referred  to,  which  will  assist  you 
materially  in  disposing  of  the  entries.  For 
entry  No.  2,  see  instructions  on  "Merchan- 
dise Account,"  page  16  ;  for  entry  No.  3,  see 
"Bills  Receivable  Account,"  page  18  ;  for  Nos. 
4,  5,  and  6,  see  comments  on  "Our  Debtors' 
Accounts,"  page  20. 

After   making   the   foregoing   entries,    pro- 


45 


&  Co.,  St  Louis,  Mo.,  bill  28th  ult,  $360; 
Greeley-B,  Grocery  Co.,  St.  Louis,  Mo.,  bill 
1st  inst,  $420;  Wickham  &  Pendleton,  St. 
Louis,  Mo.,  bill  3d  inst,  $600;  John  I. 
Adams  &  Co.,  New  Orleans,  La.,  bill  3d 
inst,  $300. 

Note. — The  above  entries  are  made  in  the 
Journal.  Debit  Merchandise  account  and 
credit  each  firm.  For  form,  see  Journal, 
page  42,  entry  No.  3.  Do  not  fail  to  search 
for  information,  as  advised  in  the  foregoing 
articles,  pages  45  and  58. 

Paid  freight  on  above  merchandise,  $60. 

Note. — For  above  entry,  debit  Freight  and 
credit  Cash.  See  Cash  Book,  page  40,  entry 
No.  9. 

Jan.  6.  Returned  to  Houston,  Meeks  & 
Co.,  St  Louis,  Mo.,  2  bbls.  of  flour,  at  $5 
per  bbl. 

Note. — For  above  entry,  debit  Houston, 
Meeks  &  Co.  and  credit  Merchandise  account. 
For  forrh  of  making  entry,  see  Journal,  page 
42,  entry  No.  4. 

Jan.  7.  Sold  on  time  to  J.  N.  Stevrart, 
city,  10  bbls.  XXX  flour,  at  $6  per  bbl.; 
5  bbls  meal,  at  $3  per  bbl. 

Note. — Enter  the  above  time  sales  in  your 
Sales  Book.  For  form  of  making  entries, 
see  our  printed  Sales  Book,  page  44,  entry 
No.   1. 

Jan.  8.  Sold  merchandise  for  cash  to 
date,  $40. 

Note. — Debit  Cash  account  and  credit  Mer- 
chandise account.  See  Cash  Book,  page  40, 
entry  No.  3.  In  regular  business,  cash  sales 
should  be  entered  each  night,  or  you  could 
have  a  special  Merchandise  column  and  post 
total  cash  sales  for  the  month  in  one  entry. 

Jan.  9.  Sold  to  A.  M.  Pike,  Springfield, 
Tenn.,  on  account,  1  bbl.  granulated  su- 
gar, 300  lbs.,  at  7  cents  per  lb. 

Note. — Enter  the  above  in  your  Sales 
Book.  For  form,  see  printed  Sales  Book, 
page  44,  entry  No.  2. 

Jan.  10.  Paid  cash  for  stamps  for  oflBce 
use,  $2. 

Note. — Debit  Expense  account  and  credit 
Cash  account.  For  form,  see  Cash  Book, 
page  40,  entry  No.  10. 

Jan.  11.  Sold  a  friend  stamps,  $1,  for 
cash,  which  yoii  had  previously  charged 
to  Expense. 

Note. — Debit  Cash  account  and  credit  Ex- 
pense account.  See  Cash  Book,  page  40,  en- 
try No.   4. 

Jan.  4.  Bought  on  time,  at  thirty  days,  Jan.   12.  Merchandise  cash   sales  since 

merchandise  as  follows:   Houston,  Meeks      the  8th  inst,  $30. 

46 


ceea*  to  make  the  entries  from  7  to  9,  as  fol- 
lows :  No.  7,  debit  Stocks  and  Bonds  and 
credit  McKinley's  Stock  account.  For  form 
of  making  the  entries,  see  our  printed  Jour- 
nal, page  42,  entry  No.  1.  For  instructions 
on  "Stocks  and  Bonds  Account,"  see  page 
16  ;  for  instructions  on  "Stock  Account,"  page 
15. 

For  entry  No.  8,  debit  McKinley's  Stock  ac- 
count and  credit  Orr,  Jackson  &  Co.  and 
Houston,  Meeks  &  Co.  For  form  of  making 
the  entry,  see  our  Journal,  page  42,  entry 
No.  2  ;  for  instructions  on  "Stock  Account," 
page  15  (when  to  credit  it)  ;  for  instructions 
on  "Our  Creditors'  Accounts,"  page  20. 

For  entry  No.  9,  debit  Cash  account  and 
credit  Bryan's  Stock  account.  For  form,  see 
Cash  Book,  page  40,  entry  No.  2.  For  in- 
structions as  to  when  to  debit  and  credit 
"Stock  Account,"  see  page  15 ;  for  instruc- 
tions on  "Cash  Account,"  page  15. 

N.  B. — Read  often  the  explanations  else- 
where under  the  head  "General  Information." 
After  reading  such  matter  nineteen  times,  the 
twentieth  reading  will  reveal  to  you  some- 
thing absolutely  new.  Read  awhile  and 
work  awhile.  The  knowledge  you  gain 
from  one  assists  you  in  comprehending  the 
other. 

POST    AND    TAKE    TRIAL    BALANCE. 

Usually  bookkeepers  take  a  Trial  Balance 
but  once  a  month — the  last  day  of  the  month  ; 
but  we  wisli  to  impress  upon  you  the  fact 
that,  the  longer  you  delay  taking  a  Trial  Bal- 
ance, the  more  difficult  it  will  be  for  you  to 
find  errors,  should  you  make  any,  and  for 
this  reason  we  advise  you  to  take  a  Trial 
Balance  before  proceeding  with  the  entries. 
See  instructions  on  taking  a  Trial  Balance, 
page  4.  The  Trial  Balance  should  agree  witli 
our  printed  Trial  Balance,  page  39.  If  it 
does  not  agree,  compare  the  two  Trial  Bal- 
ances, and  our  printed  Trial  Balance  will 
point  out  to  you  such  accounts  as  need  your 
special  attention.  We  also  suggest  that  you 
follow  instructions  on  page  10,  "How  to 
Find  Errors  in  a  Trial  Balance."  Balance 
your  Cash  Book.     See  form,  page  40. 

Did  your  Trial  Balance  agree  with  the 
first  Trial  Balance,  page  39?  If  it  did,  pro- 
ceed to  make  the  following  entries : 

Jan.  2,  19 — .  Paid  cash  for  one  month's 
store  rent,  $50. 

Note. — Debit  Expense  and  credit  Cash. 
Enter  on  right-hand  side  of  Cash  Book.  For 
form,  see  Cash  Book,  page  40,  entry  No.  7. 

Paid  cash  for  produce  (such  as  butter 
and  eggs)  to  sell  a^ain,  $5. 

Note. — Debit  Merchandise  and  credit  Cash. 
For  form,  see  Cash  Book,  page  40,  entry  No. 


Note. — Debit  Cash  and  credit  Merchandise. 
See  Cash  Book,  page  40,  entry  No.   5. 

A.  M.  Pike,  Springfield,  Tenn.,  owes 
your  firm,  on  account,  $25.  He  instructs 
your  firm  (McKinley  &  Bryan)  to  draw- 
on  him  for  tlie  amount.  You  owe  Hous- 
ton, Meel^s  &  Co.,  St.  Louis,  Mo.,  $200, 
and  you  send  them  draft  on  A.  M.  Pike 
for  $25. 

Note. — As  you  are  confident  that  Pike  will 
pay  the  draft,  you  debit  Houston,  Meeks  & 
Co.  and  credit  Pike  with  the  $25,  amount  of 
draft.  For  form  of  making  the  above  entry, 
see  Journal,  page  42,  entry  No.  5  ;  also  see 
form  of  this  draft,  page  41. 

Jan.  31.  Merchandise  cash  sales  since 
January  12,  $160;  paid  cash  for  gas,  $10. 

Note. — For  first  entry  above,  debit  Cash 
and  credit  Merchandise.  See  Cash  Book, 
page  40,  entry  No.  6.  For  second  entry,  debit 
Expense  and  credit  Cash.  See  Cash  Book, 
page  40,  entry  No.  11. 

Sold  on  time  to  John  Smith,  city,  40 
bbls.  XXX  flour,  at  $6  per  bbl;  50  lbs.  of 
lard,  at  6c.  per  lb. 

Note. — For  the  above  entry,  debit  John 
Smith  and  credit  Merchandise.  See  Sales 
Book,  page   44,  entry  No.   3. 

CREDIT  UP  SALARY. 

Credit  yourself — whose  name,  we  will 
suppose,  is  Tom  Watson  —  with  one 
month's  salary,  $50. 

Note. — For  the  above  entry,  debit  Expense 
and  credit  Tom  Watson.  See  Journal,  page 
42,  entry  No.  6.  It  is  understood  that,  when 
Watson  draws  out  all  or  a  part  of  his  sal- 
ary, you  will  debit  his  account  and  credit 
Cash,  as  he  draws  it  out.  You  could,  instead 
of  making  the  Journal  entry,  go  to  the  pay- 
ing-out side  of  the  Cash  Book  at  the  end  of 
each  month  and  debit  Expense  or  Salary  ac- 
count and  credit  Cash,  and  hand  Tom  Wat- 
son the  $50  ;  but  it  is  not  always  the  case 
that  a  bookkeeper  desires  to  check  out  his 
money  as  it  is  due.  Furthermore,  it  may  be 
that  he  will  buy  merchandise  at  the  store 
during  the  month,  which  would  necessitate 
opening  an   account  with  him. 

Tom  Watson,  the  bookkeeper,  draws  out 
cash,  $25,  on  his  salary. 

Note. — Debit  Tom  Watson  and  credit  Cash. 
See  Cash  Book,  page  40,  entry  No.  12. 

HOW  TO  POST,  ETC. 
For  instructions  as  to  "How  to  Post,"  see 
page  28.  Arrange  the  foregoing  entries  in 
your  books  of  original  entry — viz.,  the  Cash 
Book,  Journal,  and  Sales  ,  Book ;  then  post 
and  take  a  Trial  Balance,  which  should  agree 
with  the  January  31  Trial  Balance,  page  39. 


See  that  your  Cash  on  Hand,  Journal,  and 
Sales  Book  footings  agree  with  our  printed 
books  for  January  business.  Balance  your 
Cash  Book,  Journal,  and  Sales  Book.  For 
form,  see  our  printed  Cash  Book,  page  40 ; 
Journal,  page  42  ;   Sales  Book,  page  44. 

It  is  supposed  that  you  have  arranged  all 
the  foregoing  entries  in  the  books  of  original 
entry,  and  are  ready  to  post.  It  is  immate- 
rial as  to  which  book  you  post  first.  You 
understand  that  in  regular  business  the  book- 
keeper generally  posts  daily.  In  posting,  do 
not  fail  to  credit  Merchandise,  at  the  end  of 
the  month,  with  total  merchandise  sold  on 
time  during  the  month.  See  footings  in  Sales 
Book,  page  44,  entry  No.  4.  After  you  post, 
take  Trial  Balance,  which  should  agree  with 
the  January  31  Trial  Balance,  page  39.  If 
it  does  not  agree,  find  your  error,  as  directed 
on  page  10. 

FEBRUARY  BUSINESS. 

If  your  Trial  Balance  agrees  with  the 
second  Trial  Balance,  on  page  39,  you  are 
ready  to  continue  business.  If  it  does  not 
agree,  you  must  find  your  mistake  before 
proceeding ;  then  after  you  find  your  mistake, 
make  the  following  entries  : 

Feb.  1.  (1)  Merchandise  cash  sales,  $50; 

(2)  Paid   for   stationery   for   office,    $50; 

(3)  Remitted  Houston,  Meeks  &  Co.,  St. 
Louis,  Mo.,  cash  on  account,  $350;  (4) 
Paid  cash  for  gas,  $10. 

Note. — All  the  above  entries  are  made  in 
your  Cash  Book.  (1)  Debit  Cash  and  credit 
Merchandise;  see  Cash  Book,  page  40,  entry 
No.  13.  (2)  Debit  Expense  and  credit  Cash; 
see  Cash  Book,  page  40,  entry  No.  18,  (3) 
Debit  Houston,  Meeks  &  Co.  and  credit  Cash ; 
see  Cash  Book,  page  40,  entry  No.  19.  (4) 
Debit  Expense  and  credit  Cash ;  see  Cash 
Book,  page  40,  entry  No.  20. 

Handed  William  Jennings  Bryan,  on 
Private  account,  $25;  handed  William  H. 
McKinley,  on  Private  account,  $25. 

Note. — Debit  each  of  the  above  on  his  Pri- 
vate account  and  credit  Cash.  See  Cash 
Book,  page  40,  entries  Nos.  21  and  22. 

John  Jones  owes  your  firm,  McKinley  & 
Bryan,  $50  on  a  note  which  was  charged 
to  Bills  Receivable.  You  to-day  transfer 
this  note  to  Houston,  Meeks  &  Co.,  St. 
Louis,  Mo.,  and  receive  in  payment  from 
them  as  follows:  Merchandise,  $40;  cash, 
$5.  By  this  transfer  you  lose  $5  on  the 
note  (they  accept  the  note  without  re- 
course on  you). 

Note. — While  all  the  above  entry  could  be 
made  in  the  Cash  Book,  and  we  recommend 
that  nearly  all  transfer  entries  be  made  in 
the  Cash  Book,  in  this  case  we  will  carry  a 
part  of  the  entry  thrqugh  the  Journal.     For 


47 


form  of  making  the  entry,  we  refer  you  to 
Journal,  page  42,  entry  No,  7.  Debit  Mer- 
chandise and  Interest  and  Discount  and  cred- 
it Bills  Receivable.  (It  would  not  be  objec- 
tionable to  debit  Profit  and  Loss  with  the  $5 
discount,  as  it  will  in  the  end  reach  Profit 
and  Loss  account,  and  to  the  debit  side.) 
For  the  cash  part  of  the  entry,  debit  Cash  and 
credit  Bills  Receivable.  See  Cash  Book,  page 
40,  entry  No.  14. 

Feb.  4.  Your  firm,  McKinley  &  Bryan, 
own  one  share  of  City  Savings  Bank  stock 
valued  at  $110,  which  you  charged  to 
Stocks  and  Bmds  account.  Now  suppose 
you  transfer  this  bank  stock  to  Houston, 
Meeks  &  Co.,  to  be  applied  on  your  firm's 
account.  They  accept  this  one  share  of 
bank  stock  at  $115,  crediting  your  account 
with  that  amount. 

Note. — Debit  Houston,  Meeks  &  Co.  and 
credit  Stocks  and  Bonds.  For  form  of  mak- 
ing entry,  see  printed  Journal,  page  42,  entry 
No.  8. 

Sold  to  Grover  Cleveland  30  bbls.  Star 
flour  at  $6  per  bbl.,  500  lbs.  bacon  at  10c. 
per  lb.,  and  received  in  payment  as  fol- 
lows: An  order  on  Benjamin  Harrison — 
amount,  $10.  Harrison  writes  across  the 
face  of  this  order,  "Accepted,  payable  in 
fifteen  days,"  and  signs  his  name.  You 
also  received  of  Grover  Cleveland,  in  part 
payment  of  the  above,  one  share  of  City 
Savings  Bank  stock,  valued  at  $110.  Bal- 
ance of  the  above  bill  to  be  left  on  open 
account  for  thirty  days. 

Note. — First  debit  Grover  Cleveland  with 
the  merchandise  sold  him ;  enter  in  Sales 
Book.  See  Sales  Book,  page  44,  entry  No.  5. 
As  to  Harrison's  order  and  the  bank  stock, 
debit  Bills  Receivable  with  the  order,  and 
Stocks  and  Bonds  with  the  bank  stock,  and 
credit  Cleveland.  For  form  of  making  last 
two  entries,  see  Journal,  page  42,  entry  No. 
9.  After  the  «bove  is  posted,  Cleveland's  ac- 
count will  snow  that  he  is  due  your  firm 
$110,  which  you  leave  undisturbed  for  the 
present. 

Feb.  4.  (1)  Merchandise  cash  sales  since 
the  1st,  $240;  (2)  Paid  for  stamps  for 
office  use,  $2;  (3)  Remitted  Greeley-Burn- 
ham  Grocery  Co.,  cash  on  account,  less  1 
per  cent  discount,  $420. 

Note. — For  first  entry  above,  debit  Cash 
and  credit  Merchandise.  See  Cash  Book, 
page  40,  entry  No.  15.  For  second  entry, 
debit  Expense  and  credit  Cash.  See  Cash 
Book,  page  40,  entry  No,  23.  For  third  entry, 
debit  Greeley-Burnham  Grocery  Co.  with  the 
actual  cash  you  paid  them  and  credit  Cash; 


then  go  to  your  Journal  and  debit  Greeley- 
Burnham  Grocery  Co.  with  the  discount  and 
credit  Interest  and  Discount.  See  Journal, 
page  42,  entry  No.  10.  Vor  the  cash  part  of 
the  entry,  see  Cash  Book,  page  40,  entry  No. 
24.  Another  plan  to  make  entry  No.  3  is  to 
enter,  on  the  paying-out  side  of  your  Cash 
Book,  right  hand,  thus:  "Greeley-Burnham 
Grocery  Co.,  $420;"  then  enter  on  the  re- 
ceiving side  of  your  Cash  Book  thus :  "Inter- 
est and  Discount,  $4.20,"  giving  full  explana- 
tion in  the  "explanatory  column."  This  would 
leave  Cash  credited  with  the  actual  cash  paid 
out,  and  give  you  only  one  item  to  post  to 
the  debit  of  Greeley-Burnham  Grocery  Co. 
account. 

Paid  cash  for  gas,  $4. 

Note. — Debit  Expense  and  credit  Cash. 
See  Cash  Book,  page  40,  entry  No.  25. 

Feb.  14.  Received  of  A.  M.  Pike  cash  on 
account,  $20;  (2)  Merchandise  cash  sales 
since  the  4th  inst,  $936;  (3)  Remitted 
Wickham  &  Pendleton,  St.  Louis,  Mo., 
cash  on  account,  $600. 

Note. — For  entry  No.  1,  debit  Cash  and 
credit  Pike.  See  Cash  Book,  page  40,  entry 
No.  16.N  For  second  entry,  debit  Cash  and 
credit  Merchandise.  See  entry  No.  17,  page 
40.  For  third  entry,  debit  Wickham  &  Pen- 
dleton, and  credit  Cash.  See  entry  No.  26, 
Cash  Book,  page  40. 

John  Jones  brings  you  butter,  eggs,  etc., 
to  the  amount  of  $20,  which  you  expect  to 
sell  again.  You  give  him  in  payment  2 
bbls.  flour,  at  $5  per  bbl.,  and  cash  $9.  He 
(John  Jones)  owes  A.  M.  Pike  $1,  and  re- 
quests you  to  credit  A.  M.  Pike  with  $1 
and  charge  the  same  to  his  (Jones's)  ac- 
count. 

Note. — You  dispose  of  the  above  entry  as 
follows :  First,  go  to  your  Journal  and  debit 
Merchandise  and  credit  John  Jones  with  the 
$20.  For  form,  see  printed  Journal,  page  42, 
entry  No.  11.  Next  debit  John  Jones  on  the 
Sales  Book  with  two  barrels  of  fiour.  See 
Sales  Book,  page  44,  entry  No.  6.  Enter  the 
cash  you  hand  him,  $9,  on  the  paying-out 
side  of  your  Cash  Book,  debiting  John  Jones 
and  crediting  Cash.  See  Cash  Book,  page  40, 
entry  No.  27.  For  the  $1  he  instructs  you 
to  hand  to  Pike,  make  a  Journal  entry,  debit- 
ing John  Jones  and  crediting  Pike.  See 
Journal,  page  42,  entry  No.  11.  When  all 
the  above  is  posted,  John  Jones's  account 
will  balance.  The  above  entries  might  be 
made  with  less  work,  but  the  plan  recom- 
mended is  the  most  intelligible  way  to  dis- 
pose of  them.  The  old  bookkeeper  can  better 
afford  to  take  short  cuts  than  the  student  can, 
and  we  regret  to  say  that  some  bookkeepers 
so  abridge  their  work  that  only  they  can  un- 
derstand it. 


48 


Bought  on  time  as  follows:  Houston, 
Meeks  &  Co.,  bill  3d  inst,  $120;  Greeley- 
Burnham  Grocery  Co.,  bill  12th  inst., 
$200. 

Note. — For  above  debit  Merchandise  and 
credit  the  different  firms.     See  Journal,  page 

42,  entry  No.   13. 

Sold  on  time  to  John  N.  Stewart,  city, 
10  lbs.  coffee,  at  25c.  per  lb.;  one  ham,  18 
lbs.,  at  20c.  per  lb. 

Feb.  16.  Sold  on  time  to  T.  C.  Skeen, 
50  bbls.  XXX  flour,  at  $6  per  bbl.;  1  case 
of  butter,  30  lbs.,  at  20c.  per  lb. 

Feb.  28.  Sold  on  time  to  John  Smith, 
127  North  High  street,  10  bbls.  meal,  at 
$3  per  bbl.;  20  lbs.  of  G.  sugar,  at  7c. 
per  lb. 

Note. — For  above  debit  the  persons  and 
credit  Merchandise.  See  Sales  Book,  page 
44,  entries  Nos.  7,  8,  and  9. 

Feb.  28.  Credit  yourself,  Tom  Watson, 
bookkeeper,  with  one  month's  salary,  $50. 

Note. — Debit  Expense  and  credit  Watson. 
For  form,  see  printed  Journal,  page  42,  en- 
try No.  14.  Also  see  explanation  on  page 
47,  article  "Credit  Up  Salary." 

GET  READY  TO  TAKE  TRIAL  BALANCE. 
Credit  Merchandise  with  total  time  sales 
this  month,  as  per  Sales  Book,  page  44,  entry 
No.  10.  Then  Balance  your  Cash  Book,  as 
per  printed  Cash  Book,  page  40,  February 
business.  Also  balance  Journal  and  Sales 
Book  each  month,  as  per  printed  books.  Your 
February  Trial  Balance  should  agree  with 
printed  Trial  Balance  on  page  39. 

MARCH  BUSINESS. 

March  1.  (1)  Merchandise  cash  sales 
to-day,  $250;  (2)  Deposited  cash  in  First 
National  Bank,  $75;  (3)  Paid  cash  for 
gas  for  office  use,  $10;  (4)  Paid  freight 
on  merchandise  from  St.  Louis,  $8;  (5) 
Paid  cash  for  stamps  for  office  use,  $5; 
(6)  Sent  your  note,  at  30  days,  to  Hous- 
ton, Meeks  &  Co.,  to  be  applied  on  your 
account — amount  of  note,  $60. 

Note. — Dispose  of  the  foregoing  as  fol- 
lows: (1)  Credit  Merchandise  and  debit 
Cash;  see  Cash  Book,  page  40,  entry  No.  28. 

(2)  Debit  First  National  Bank  and  credit 
Cash ;  see  Cash  Book,  page  40,  entry  No.  35. 

(3)  Debit  Expense  and  credit  Cash;  see  Cash 
Pook,  page  40,  entry  No.  36.  (4)  Debit 
Freight  and  credit  Cash;  see  Cash  Book, 
page  40,  entry  No.  37.  (5)  Debit  Expense 
and  credit  Cash;  see  Cash  Book,  page  40,  en- 
try No.  38.  (6)  Debit  Houston,  Meeks  &  Co. 
and  credit  Bills  Payable;   see  Journal,  page 

43,  entry  No.  15. 


March  5.  (1)  Merchandise  cash  sales 
since  the  1st,  $450;  (2)  Received  of  John 
N.  Stewart,  cash  on  account,  $6.10. 

Note. — Dispose  of  these  entries  as  follows : 
(1)  Debit  Cash  and  credit  Merchandise;  see 
Cash  Book,  entry  No.  29.  (2)  Debit  Cash 
and  credit  Stewart;  see  Cash  Book;  entry 
No.  30. 

March  15.  (1)  Merchandise  cash  sales 
since  the  5th  inst.,  $85;  (2)  Received  of 
John  Smith,  cash  on  account,  less  2  per 
cent  discount,  $274.40;  (3)  Remitted 
Houston,  Meeks  &  Co.,  your  creditors,  on 
account,  $120,  less  1  per  cent  discount," 
(4)  Paid  cash  for  gas,  $6;  (5)  Remitted 
Greeley-Burnham  Grocery  Co.,  on  account, 
$200,  less  1  per  cent  discount;  (6)  Sold 
to  John  N.  Stewart,  on  account,  5  bbls. 
flour,  at  $6  per  bbl. 

Note. — Dispose  of  above  as  follows:  (1) 
Debit  Cash  and  credit  Merchandise ;  for  form 
of  making  entry,  see  Cash  Book,  page  40,  en- 
try No.  31,  (2)  Debit  Cash  with  actual  cash, 
received  of  John  Smith  and  credit  John 
Smith  with  the  same  amount  in  Cash  Book, 
then  go  to  your  Journal  and  debit  Interest 
and  Discount  and  credit  John  Smith  with 
the  discount ;  for  form,  see  Cash  Book,  entry 
No.  32  ;  also  see  Journal,  page  43,  entry  No. 

16.  (3)  Debit  Houston,  Meeks  &  Co.  with 
actual  cash  sent  them  and  credit  cash  in 
Cash  Book ;  then  go  to  your  Journal  and 
debit  Houston,  Meeks  &  Co.  and  credit  Inter- 
est and  Discount;  for  form  of  making  the 
two  entries,  see  Cash  Book,  page  40,  entry 
No.   39  ;   also  see  Journal,  page  43,  entry  No. 

17.  (4)  Debit  Expense  and  credit  Cash;  see 
Cash  Book,  page  42,  entry  No.  40.  (5)  Dis- 
pose of  this  entry  by  the  same  plan  you  dis- 
posed of  Houston,  Meeks  &  Co. ;  for  form, 
see  Cash  Book,  page  40,  entry  No.  41 ;  Jour- 
nal, page  43,  entry  No.  18.  (6)  Debit  Stew- 
art in  Sales  Book  and  extend  the  amount  into 
outside  column,  to  be  posted  to  the  credit  of 
Merchandise  at  the  end  of  the  month;  see 
Sales  Book,  page  44,  entry  No.  11. 

March  20.  (1)  Sent  check  on  First  Na- 
tional Bank,  to  pay  your  note  in  favor  of 
Houston,  Meeks  &  Co.,  $60;  (2)  Sold  to 
John  Smith,  on  account,  40  bbls.  flour,  at 
$6  per  bbl.;  200  bbls.  meal,  at  $3  per  bbl. 

Note. — Dispose  of  the  above  entries  as  fol- 
lows:  (1)  Debit  Bills  Payable  and  credit 
Bank;  for  form,  see  JournaJ,  page  43,  entry 
No.  19.  (2)  Debit  John  Smith  in  Sales  Book 
and  extend  the  amount  into  the  right-hand 
column,  to  be  credited  to  Merchandise  at  the 
end  of  the  month ;  see  Sales  Book,  page  44, 
entry  No.  12. 

.  March  30.  (1)  Sold  to  T.  C.  Skeen,  on 
account,  300  lbs.  granulated  sugar,  at  70. 


49 


per  lb.;  30  bbls.  of  flour,  at  $6  per  bbl.; 
(2)  Received  of  T.  C.  Skeen,  cash  on  ac- 
count, $306;  (3)  Merchandise  cash  sales 
since  the  15th,  $120;  (4)  Remitted  John 
I.  Adams  &  Co.,  your  creditors,  cash  on 
account,   $300;    (5)    Paid   cash   for   store 

,  rent,  $25;  (6)  Bought,  on  time,  of  Hous- 
ton, Meeks  &  Co.,  as  per  their  bill  of  the 
8th  inst,  $670;  (7)  Bought  of  Greeley- 
Burnham    Grocery    Co.,    on   time,    as    per 

■  their  bill  of  the  12th,  $390;  (8)  Bought  of 
Wickham  &  Pendleton,  on  time,  as- per 
their  bill  of  the  22d  inst,  $630. 

Note. — Dispose  of  the  foregoing  entries  as 
follows:  (1)  Debit  Skeen  and  credit  Merchan- 
dise; see  Sales  Book,  page  44,  entry  No.  13. 
( 2 )  Debit  Cash  and  credit  Skeen ;  see  Cash 
Book,  page  40,  entry  No.  33.  (3)  Debit  Cash 
and  credit  Merchandise ;  see  Cash  Book,  page 
40,  entry  No.  34.  (4)  Debit  John  I.  Adams 
&  Co.  and  credit  Cash;  see  Cash  Book,  page 
40,  entry  No.  42.  (5)  Debit  Expense  and 
credit  Cash;  see  Cash  Book,  page  40,  entry 
No.  43.  (6  to  8)  Debit  Merchandise  and  cred- 
it the  different  firms ;  for  form,  see  Journal, 
page  43,  entry  No.  20. 

CHARGING   INTEREST    ON   PRIVATE 
ACCOUNTS. 

If  you  remember,  the  Memorandum 
Agreement  between  McKinley  and  Bryan 
states  that  6  per  cent  interest  from 
average  date  is  to  be  charged  to  their 
respective  Private  accounts,  which  would 
be  25  cents,  each,  to  date.  Debit  their 
Private  accounts  in  Journal  and  credit 
Interest  and  Discount.  For  form,  see 
printed  Journal,  page  43,  entry  No.  21. 

NEXT. 
.  (1)  See  that  your  Journal  footings,  Cash 
on  Hand,  and  Sales  Book  footings  agree  with 
the  printed  book.  (2)  Post  the  entries  of 
each  of  your  books  of  original  entry — Cash, 
Journal,  and  Sales  Book.  (3)  Balance  your 
Cash  Book.  (4)  After  you  post,  take  a  Trial 
Balance,  which  should  agree  with  the  printed^ 
March  Trial  Balance,  page  39.  Then  declare 
profits,  as  instructed  on  page  26. 

THE  SKELETON  LEDGER. 
Before  closing  out  this  set,  spend  consid- 
erable time  in  reading  and  studying  the 
"Skeleton  Ledger,"  page  12,  and  read  the  in- 
structions on  "Declaring  Profits,"  pages  13, 
14,  and  26.  To  make  a  study  of  the  "Skele- 
ton Ledger,"  page  12,  as  advised  on  pages  13 
and  14,  will  be  of  great  assistance  to  you  in 
closing  this  set. 

DECLARE   PROFITS. 
After  taking  the  March  Trial  Balance,  pro- 
ceed to  declare  profits. 


APRIL  1,  19—. 

As  stated  on  page  33,  in  order  to  declare 
profits  correctly,  you  must  take  inventory  of 
your  merchandise,  but  in  this  case  you  can 
only  estimate  your  merchandise,  and  will 
estimate  it  to  be  $1,400. 

1.  As  instructed  on  page  26,  credit  Mer- 
chandise account,  in  red  ink,  "By  Inventory, 
$1,400  ;"  then  add  the  credit  side  of  your 
Merchandise  account,  including  your  inven- 
tory ;  then  add  the  debit  side  of  your  Mer- 
chandise account,  and  subtract  the  smaller 
side  from  the  larger.  If  the  debit  side  is  the 
larger,  then  your  books  show  that  you  have 
lost  money.  If  the  credit  side  is  the  larger, 
your  books  show  that  you  have  gained  on 
Merchandise  account,  though  the  expenses 
may  in  some  cases  offset  the  gain  on  Mer- 
chandise account,  and,  when  all  the  gains  and 
losses  are  closed  into  Profit  and  Loss,  the 
business  may  show  a  loss.  In  this  case  your 
Merchandise  account  shows  a  gain  of  $509.50, 
which  is  larger  than  your  total  losses.  You 
will  note  that  the  credit  side  of  Merchandise 
account  is  $509.50  greater  than  the  debit 
side,  this  being  your  gain  on  Merchandise 
account.  Now  you  will  proceed  to  close  this 
account  into  Profit  and  Loss,  as  follows : 
With  red  ink,  enter  on  the  debit  side  of  Mer- 
chandise account,  thus :  "April  1.  To  Profit 
and  Loss  [give  Ledger  page  of  Profit  and 
Loss  account],  $509.50  ;"  then  go  to  the  credit 
side  of  your  Profit  and  Loss  account  and  en- 
ter in  black  ink,  thus :  "April  1.  By  Merchan- 
dise [give  the  number  of  page  on  which  Mer- 
chandise account  is  found],  $509.50."  For 
diagram  and  form  of  making  this  transfer 
entry,  see  our  "Merchandise  Account,"  page 
35;  also  "Profit  and  Loss  Account,"  page  35. 

2.  By  adding  the  debit  and  credit  sides  of 
your  Merchandise  account  you  will  see  that 
both  sides  agree.  Rule  up  Merchandise  ac- 
count and  place  footings  between  red  lines, 
as  shown  on  "Merchandise  Account,"  page 
35;  then  bring  the  inventory,  $1,400,  down 
on  the  debit  side,  as  shown  in  the  diagram  of 
"Merchandise  Account,"  pages  12  and  35. 

3.  By  referring  to  your  Trial  Balance  you 
will  find  that  Expense  shows  a  debit  of  $273. 
Read  instructions  on  page  26,  "How  to  Close 
Expense  Account;"  then  enter,  in  red  ink,  on 
credit  side  of  Expense  account,  thus:  "19 — , 
April  1.  By  Profit  and  Loss,  $273  ;"  then  go 
to  Profit  and  Loss  account,  and  enter,  in  black 
ink,  on  debit  side,  thus:  "19 — ,  April  1.  To 
Expense,  $273." 

4.  By  again  referring  to  your  Trial  Bal- 
ance you  find  that  Interest  and  Discount  ac- 
count shows  a  debit  of  $2.59.  Enter,  in  red 
ink,  on  the  credit  side  of  your  Interest  and 
Discount  account :  "By  Profit  and  Loss, 
$2.59,"  giving  date,  etc. ;  then  enter,  in  black 
ink,  on  the  debit  side  of  Profit  and  Loss  ac- 
count, giving  the  date :  "To  Interest  and  Dis- 
count, $2.59."  For  form  of  making  these 
transfer  entries,  see   "Expense,"  also   "Inter- 


50 


est  and  Discount,"  and  "Profit  and  Loss  Ac-  "By  Stocks  and  Bonds,   $5"    (see  "Profit  and 

count,"  pages  35,   36.  Loss  Account,"  credit  side,   page   35).      Next, 

5.  Close  Freight  account  into  Profit  and  rule  up  your  Stoclcs  and  Bonds  account,  as 
Loss  account  on  ttie  same  principle  you  closed  shown  in  "Stocks  and  Bonds  Account,"  pages 
Expense  and  Interest  and  Discount.  12   and  36,   and  bring  footings  down  between 

6.  By  again  referring  to  your  Trial  Bal-  the  red  lines,  and  the  inventory,  |110,  down 
ance  you  find  that  Stocks  and  Bonds  account  on  the  debit  side. 

shows  a  debit  of   $105.      This   is  another  ac-  7,   By   again   referring  to  the   debit   side   of 

count  affected  when  you  declare  profits,  pro-  your  Trial  Balance,  you  find  no  more  accounts 

vided   any   sales    have    been   made    of   stocks  that   should   be   closed   into   Profit   and   Loss, 

or  bonds,  or  you  have  received  any  dividends,  and  by  reference  to   the  credit  side   of  your 

interest,   etc.     You  find,  by  referring  to  your  Trial    Balance,     you    find    no    accounts    that 

Stocks  and  Bonds  account  (provided  you  have  should  be  closed  into  Profit  and  Loss, 
itemized   Stocks   and   Bonds   account   in   your  8.  You   will   now    take    another    Trial    Bal- 

Ledger,    as   instructed),   that   you   bought,    on  ance,    for    three    reasons:     (1)     The    student 

January   1,    one   share   of   City   Savings   Bank  should  take  a  Trial  Balance  often  in  closing 

Stock  (see  debit  side  of  Stocks  and  Bonds  ac-  books,  as  it  enables  him  to  more  readily  un- 

count),    $110.      You    also    find    that,    on    Feb-  derstand   the   closing  entries — taking  instruc- 

ruary   4,   you  bought  one  share  of  City   Sav-  tions   in   broken   doses,    so   to   speak.      (2)    It 

ings   Bank   Stock,    $110.      By  referring  to   the  avoids   much   trouble   in   finding   errors.      The 

credit  side  of  your  Stocks  and  Bonds  account  more  work  you  do  before  taking  a  Trial  Bal- 

you   find   that,    on   February    4,    you   sold   one  ance,  the  more  difficult  it  is  to  find  an  error, 

share   of  City   Savings   Bank   Stock   for   $115,  (3)   It  is  almost  absolutely  necessary  to  take 

and  from  a  mathematical   point  of  view  you  a   Trial   Balance   just   after   declaring   profits, 

can   readily  see   that  you   have  gained   $5   on  in  order  to  make  out  a  correct  Statement  of 

the  sale  ;  so  we  will  apply  the  rules  of  Double-  the  Business.     Your  Trial  Balance,  just  after 

Entry  Bookkeeping  and  see  if  the  results  will  declaring    profits,    should    agree   with    printed 

be  the  same  as  those  we  obtain  from  an  or-  Trial  Balance,  April   1,  page  39, 
dinary     mathematical     calculation.       If     you  9.  After     taking    your     Trial     Balance,     as 

bought   two   shares   and   sold   only   one,    it   is  above  directed,  and  it  agrees  with  the  April 

evident    that   you   have    one    share    on    hand.  Trial  Balance,  page  39,  make  out  a  statement 

Now    you   will   consider    this   your    inventory  of  the  business,  which  is  nothing  more  than 

of   Stocks  and  Bonds  and  credit   Stocks  and  a    condensed    Trial    Balance.      You    add    the 

Bonds    account,    in    red    ink :    "By    Inventory,  amounts  due  you  on  open  accounts  and  enter 

$110."     Next,  subtract  the  footings  of  Stocks  the  total  on  the  debit  side  of  your  Trial  Bal- 

and    Bonds    account,    debit    side    from    credit  ance    (or  Statement  of  Business),  instead  of 

side,  and  you  find  that  the  credit  side  is   $5  the     several     accounts;     and     you     add     the 

greater  than  the  debit  side.    Then  your  books  amounts  you  are  due  others  on  open  accounts, 

show  that  you  have  gained  $5  on  your  Stocks  and    insert    the    total    amount    on    your    con- 

and    Bonds.      This   agrees  with   the   foregoing  densed  Trial  Balance  (or  Statement),  instead 

mathematical   calculation.      Close   this   differ-  of   writing   the   several   names   and   amounts, 

ence  into  Profit  and  Loss  account,  as  follows :  This  gives  a  condensed  Statement  of  the  Busi- 

Enter,    in    red    ink,    on    the    debit    side    (see  ness,  and  the  proprietor  can  at  a  glance  tell 

"Stocks  and  Bonds  Account,"  page   36),   "To  how   much  he   is   due   others   and   how   much 

Profit    and    Loss,    $5,"    and   then   go    to   your  others  are  due  him  on  open  account. 
Profit    and   Loss   account   and   enter    (on   the  Your  statement  should  agree  with  the  fol- 

credit  side),   in  black  ink,   giving  dates,   etc.,  lowing  statement: 

STATEMENT,  McKINLEY  &  BRYAN,  APRIL  1,  19—. 

Assets.  Dr.  Ce. 

Cash   on  hand    $2,494  41 

Mdse.  on  hand,  as  per  Inventory 1,400  00 

Stocks  and  Bonds  (1  share  C.  S.  Bank  Stock)    110  00 

Bills  Receivable   (notes  due  us)    10  00 

First  National  Bank    (on  deposit)    15  00 

McKinley,   Private   account    25  25 

Bryan,   Private   account    25  25 

Due  us  on  open  accounts  1,336  00 

Liabilities. 

W.  H.  McKinley,  Stock  account  ^ $1,665  00 

W.  J.  Bryan,  Stock  account  1»665  00 

Profit  and  Loss  (net  gain)    170  91 

Tom  Watson,  bookkeeper   (balance  on  salary)    75  00 

Due  others  on  open  accounts   1,840  00 

O.K.  Tom  Watson,  Bookkeeper.  $5,415  91     $5,415  91 

51 


Note, — Tom  Watson  has  been  credited  with 
only  two  months'  salary,  whereas  he  has 
worked  three  months.  After  you  work  this 
set  a  few  times  and  believe  that  you  can 
work  it  without  the  guide,  you  may  credit 
Tom  Watson,  the  last  month,  with  March 
salary.  This  will,  however,  in  the  end,  make 
several  accounts  differ  from  our  guide  just 
$50.     This  Is  one  test  for  you.     Try  it. 

10.  After  making  out  the  foregoing  state- 
ment, you  would,  in  regular  business,  be  ready 
to  continue  your  work,  making  new  entries 
as  they  might  come  in  regular  business ;  but 
we  must,  of  course,  in  this  work,  have  a  stop- 
ping place,  and  we  can  think  of  no  better  way 
to  discontinue  than  to  imagine  that  McKinley 
and  Bryan  have  decided  to  dissolve  partner- 
ship, and  that  they  have  succeeded  in  selling 
their  merchandise  to  Mark  Hancock  for  $1,- 
400  in  cash  ;  and  you  will  now  suppose  that 
Mr.  Hancock  hands  you  the  $1,400,  and,  aft- 
er counting,  to  see  that  the  cash  is  correct, 
you  enter  the  amount  on  the  receiving  side  of 
your  Cash  Book,  debiting  Cash  and  crediting 
Merchandise,  the  same  as  you  would  in  mak- 
ing everyday  entries  of  cash  sales.  For  form, 
see  printed  Cash  Book,  page  41,  entry  No.  44. 
When  this  is  posted  to  the  credit  side  of  the 
Merchandise  account,  the  account  will  bal- 
ance. We  will  suppose  that  you  also  sell  to 
Mr.  Hancock  one  share  of  City  Savings  Bank 
Stock  for  $110.  Debit  Cash  and  credit  Stocks 
and  Bonds  account,  $110,  in  Cash  Book.  See 
Cash  Book,  page  41,  entry.  No.  45. 

It  is  not  always  the  case  in  closing  books, 
especially  in  discontinuing  business,  that  the 
firm  can  sell  merchandise,  etc.,  for  full 
amount,  nor  are  they  able  to  collect  full 
amounts  due  them  on  open  account.  When 
they  sell  merchandise,  stocks  and  bonds,  etc., 
for  less  than  amount  at  which  they  are  in- 
ventoried, the  bookkeeper  closes  the  difference 
into  Profit  and  Loss.  The  same  rule  applies 
to  the  amounts  due  you  from  your  customers. 
You  will,  however,  in  this  case,  imagine  that 
all  of  your  customers  pay  you  the  full 
amount,  and  that  you  have  this  day  received 
of  the  following  customers  cash  in  full  of 
accounts,  as  follows : 

John  N.  Stewart,  $155;  John  Smith, 
$870;  Grcver  Cleveland,  $110;  T.  C.  Skeen, 
$201. 

Note. — Enter  the  above  in  your  Cash  Book, 
debiting  Cash  and  crediting  each  person.  See 
the  receiving  side  of  our  printed  Cash  Book, 
page  41,  entries  Nos.  46  to  49.  When  this 
is  posted  to  the  credit  of  each  account,  the 
accounts  will  balance. 

11.  Again  referring  to  your  Trial  Balance, 
you  find  that  you  have  on  deposit  in  the  First 
National  Bank  $15,  and  you  will  suppose  that 
you  write  a  check  payable  to  your  firm,  Mc- 
Kinley &  Bryan,  for  $15,  and  send  the  oflfice 
boy  to  the  bank  and  get  the  cash.  Then  enter, 
when  the  boy  returns  with  the  cash,  on  the 
receiving  side  of  the  Cash  Book,  thus :  "First 


National  Bank,  checked  out  $15."     See  Cash 
Book,  page  41,  entry  No.  50. 

12.  You  find  that  William  H.  McKinley  and 
William  J.  Bryan  have  each  checked  out,  on 
their  Private  accounts,  $25.  Including  the 
interest,  they  are  each  due  the  business  $25.- 
25  (see  your  Trial  Balance)  ;  but,  inasmuch 
as  the  business  is  due  them  more  than  they 
are  due  the  business,  you  will  not  have  them 
to  pay  this  in  cash,  but  will  transfer  the 
amount  of  their  Private  accounts  to  the  debit 
of  their  Stock  accounts,  as  follows :  Enter  on 
the  credit  side  of  McKinley's  Private  account, 
in  red.  ink,  "By  W.  H.  McKinley's  Stock  ac- 
count, $25.25;"  then  go  to  the  debit  side  of 
McKinley's  Stock  account  and  enter,  in  black 
ink,  thus :  "To  W.  H.  McKinley's  Private  ac- 
count, $2  5.25."  For  form  of  making  this 
transfer  entry,  see  "McKinley's  Private  Ac- 
count," credit  side,  page  37;  "McKinley's 
Stock  Account,"  debit  side,  page  35.  Trans- 
fer Bryan's  Private  account  to  his  Stock  ac- 
count by  the  same  plan  you  transferred  Mc- 
Kinley's Private  account.  You  could  have 
made  these  transfer  entries  through  the  Jour- 
nal by  entering  them  thus :  "W.  H.  McKin- 
ley's Stock  account  to  W.  H.  McKinley's  Pri- 
vate account,  amount  of  latter  transferred 
to  debit  of  former,  $25.25."  In  posting  this 
you  would  debit  McKinley's  Stock  account 
and  credit  McKinley's  Private  account,  and, 
of  course,  3'ou  could  have  transferred  Bryan's 
Private  account  by  the  same  plan. 

13.  By  again  referring  to  your  Trial  Bal- 
ance, you  find  that  Bills  Receivable  shows  a 
debit  of  $10.  Harrison  owes  you  on  an  ac- 
cepted order  $10,  which  you  charged  to  Bills 
Receivable,  and  which  has  not  been  paid. 
You  will  now  suppose  that  he  hands  you  cash 
to  pay  this.  Debit  Cash  and  credit  Bills  Re- 
ceivable. See  Cash  Book,  page  41,  entry 
No.  51. 

14.  By  referring  to  your  Trial  Balance  you 
find  that  you  are  due  your  creditors  certain 
amounts,  and  you  will  suppose  that  you  have 
this  day  sent  them  cash,  as  follows :  Hous- 
ton, Meeks  &  Co.,  $670  ;  Orr,  Jackson  &  Co., 
$150 ;  Greeley-Burnham  Grocery  Co.,  $390  ; 
Wickham  &  Pendleton,  $630. 

Note. — Enter  the  above  on  the  paying-out 
side  of  your  Cash  Book,  debiting  the  firms 
and  crediting  Cash.  For  form  of  making  en- 
tries, see  our  printed  Cash  Book,  page  41, 
right-hand,  entries  Nos.  52  to  55.  After  this 
is  posted  to  the  debit  of  each  account,  the 
accounts  in  Ledger  will  balance. 

15.  You  find,  by  referring  to  your  Trial 
Balance,  that  Profit  and  Loss  shows  a  net 
gain  of  $170.91.  If  you  remember,  and  as  is 
shown  by  your  books,  McKinley  and  Bryan 
are  equal  partners,  and  their  Memorandum 
Agreement  states  that  they  are  to  .share  equal- 
ly in  losses  and  gains.  Now,  you  may  trans- 
fer this  gain  to  the  credit  of  their  Stock  ac- 
counts, and  will  make  this  transfer  entry 
through  the  Journal,  though  it  could  be  made 
directly  to  the  Ledger ;  but  in  order  to  obtain 


52 


a  better  idea  of  making  entries  through  the 
Journal  you  will  make  the  entry  by  this 
plan  :  Debit  Profit  and  Loss  account  and  cred- 
it their  Stock  accounts,  each,  with  one-half 
Profit  and  Loss.  For  form,  see  printed  Jour- 
nal, page  43,  entry  No.  22.  Post  the  forego- 
ing entries  as  follows :  Go  to  the  debit  side 
of  Profit  and  Loss  and  enter  "To  Sundry 
Stock,  $170.91,"  and  place  the  Ledger  page 
in  the  Journal,  according  to  former  instruc- 
tions. Then  go  to  McKinley's  Stock  account 
and  enter,  "By  Profit  and  Loss,  $85.46." 
Place  Ledger  page  in  Journal  and  Journal 
page  in  Ledger.  Credit  Bryan's  Stock  ac- 
count with  his  part  of  the  Profit  and  Loss  by 
the  same  plan  you  credited  McKinley's. 

16.  After  the  foregoing  entries  are  posted, 
you  find,  by  referring  to  your  Ledger,  that 
McKinley's  Stock  account  shows  a  credit 
(subtract  the  debit  side  from  the  credit  side) 
of  $1,725.21,  and  that  William  J.  Bryan's 
Stock  account  shows  a  credit  of  $1,725.20. 
Of  course  the  business  is  due  them,  respect- 
ively, these  amounts,  according  to  the  rules 
of  Double-Entry  Bookkeeping. 

17.  By  again  referring  to  your  Trial  Bal- 
ance, you  find  that  all  accounts  have  been 
closed  except  that  of  yourself — Tom  Watson, 
bookkeeper — and  that  the  firm  is  due  you  a 
balance  of  $75.  Mr.  Watson,  you  will  now 
suppose  that  you  take  this  amount  of  money 
out  of  the  cash  drawer  and  place  it  in  your 
pocket,  after  entering  it  on  the  credit  side  of 
your  Cash  Book,  thus :  "Tom  Watson,  book- 
keeper, drew  out  balance  on  salary,  $75."  See 
Cash  Book,  page  41,  entry  No.  56. 

IMPORTANT    RULES. 

Comply  with  the  following  rules :  Never 
pay  out  cash  before  you  make  an  entry  of  it 
on  the  paying-out  side  of  your  Cash  Book. 
Never  give  a  receipt  for  cash  until  you  count 
it  and  s6e  that  it  is  correct,  and  then  enter 
it  on  the  receiving  side  of  your  Cash  Book. 
If  no  receipt  is  required,  never  place  the  cash 
in  the  cash  drawer  or  in  the  safe  until  you 
first  enter  it  on  the  receiving  side  of  the  Cash 
Book.  If  a  person  will  comply  with  the  fore- 
going rules,  how  can  the  cash  get  out  of  bal- 
ance, unless  he  makes  aji  error  in  counting 
it? 

SUGGESTIONS. 

For  a  large  office  we  recommend  a  printed 
receipt  book  something  similar  to  a  check 
book,  to  be  used  in  taking  receipts  for  cash 
you  pay  out.  Never  detach  any  of  the  re- 
ceipts from  the  receipt  book.  For  instance, 
we  could  have  printed  a  book  with  three  re- 
ceipts on  each  page.  Whenever  we  pay  out 
cash  to  a  person,  he  is  supposed  to  be  pres- 
ent to  receive  it.     Have  the  person  sign  a  re- 


ceipt  in   this   receipt   book.     If  we  never   de 
tach   any  of  the  pages,   none  of  our  receipts 
will  ever  be  misplaced. 

For  money  paid  to  us,  we  recommend  a  re- 
ceipt book  with  stub.  We  fill  in  the  stub  with 
the  person's  name,  the  date,  the  amount  paid, 
and  for  what  paid.  We  fill  out  and  detach 
the  receipt  and  hand  it  to  the  person.  Our 
bookkeeper  can  then,  from  the  stubs  of  the 
receipt  book,  enter  the  amounts  in  his  Cash 
Book. 

CONTINUE  YOUR  WORK. 

18.  Now,  we  will  go  back  to  closing  this 
set.  After  subtracting  the  debit  side  of  your 
Cash  Book  from  the  credit  side,  you  will  find 
that  your  Cash  Book  shows  $3,450.41  cash 
on  hand.  You  fin::;,  by  referring  to  McKin- 
ley  &  Bryan  Stock  account,  you  are  due 
them  this  amount  of  money — that  you  are 
due  McKinley,  $1,725.21,  and  Bryan,  $1,725.- 
20,  giving  McKinley  the  odd  cent. 

It  is  a  fact  that  you  have  closed  all  the 
other  accounts,  and  there  is  no  reason  why 
you  are  not  ready  to  turn  this  money  over  to 
the  proprietors.  You  might  have  each  of 
them  give  you,  the  bookkeeper,  a  receipt 
stating  that  he  has  this  day  received  this 
amount  of  you,  being  the  full  amount  due 
him  from  the  business  of  McKinley  &  Bryan. 
Then  you  enter  on  the  paying-out  side  of  the 
Cash  Book,  "William  H.  McKinley's  Stock  ac- 
count, handed  him,  $1,725.21,"  being  the 
amount  the  business  is  due  him.  Then  enter 
on  the  paying-out  side  of  your  Cash  Book, 
"William  Jennings  Bryan's  Stock  account, 
handed  him,  $1,725.20,"  being  the  amount  the 
business  is  due  him.  See  printed  Cash  Book, 
page  41,  entries  Nos.  57  and  58.  Now  you 
will  readily  see  this  will  take  all  the  cash — 
no  more  and  no  less — that  your  Cash  Book 
calls  for,  which  is  one  of  the  many  beauties 
of  Double-Entry  Bookkeeping.  Post  all  the 
foregoing  entries. 

19.  Now,  it  is  supposed  that,  after  ruling 
up  all  accounts  in  your  Ledger  and  Cash 
Book,  you  have  severed  your  connection  with 
McKinley  &  Bryan;  and  if  you  have  followed 
our  instructions,  we  have  no  doubt  that  you 
have  done  your  work  creditably,  and  that 
McKinley  &  Bryan  will  readily  give  you  a 
strong  recommendation. 

TO  MAKE  IT  PRACTICAL. 
Throughout  this  book  the  author  has  tried 
to  preserve  a  conversational  style,  using  plain 
language  for  the  benefit  of  the  student  whose 
literary  education  is  limited. 

TRY    IT    AGAIN. 
The  student  will  now  proceed  to  work  this 
set  over,  according  to  instructions  found  un- 
der the  heading  "The  Course  Outlined." 


53 


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54 


ENTERING  NOTES  IN  REGISTERS. 

WE  advise  firms  that  handle  many  notes  to  use  Note  Registers.  When  Registers 
are  used,  it  is  not  necessary  to  be  so  particular  about  giving  the  descrip- 
tion of  a  note  when  you  are  entering  it  in  books  of  original  entry.  For  instance,  we 
receive  John  Jones's  thirty-day  note  on  account.  We  enter  this  note  in  Note  Register, 
describing  the  note  in  full  in  the  special  columns  and  giving  number  of  note  in  Note 
Register.  In  making  our  entry  in  books  of  original  entry  (Cash  Book  or  Journal) 
we  give  the  number  of  the  note,  but  need  not  mention  Jones's  name.  If,  at  any  time 
in  the  future,  we  should  have  occasion  to  refer  to  this  note,  the  number  given  in  our 
Journal  or  Cash  Book,  as  the  case  may  be,  would  refer  us  to  our  Note  Register,  where 
we  would  find  a  full  description  of  the  note — for  what  received,  when  received,  time 
to  run,  when  due,  etc.  When  Jones  pays  this  note,  we  simply  credit  Bills  Receivable, 
giving  the  number  of  the  note;  and  we  might  give  Jones's  name  in  the  "explanatory 
column,"  but  in  posting  to  the  Ledger  we  give  only  the  number  of  the  note.  By  looking 
at  Bills  Receivable  account  in  Ledger,  the  number  will  refer  us  to  Jones's  note  in 
Note  Register.  Tliis  rule  also  applies  to  Bills  Payable — notes  we  give  others.  When 
we  transfer  a  note,  in  addition  to  making  entry  in  Journal  or  Cash  Book,  we  write,  in 

pencil  in  Note  Register,  under  "Remarks,"  "Transferred  to for ,"  giving  date 

of  transfer.  Then,  when  we  are  advised  of  its  payment,  we  write,  in  red  ink,  over  the 
pencil  marks,  "Paid,"  leaving  the  pencil  marks  for  future  reference.  If  you  handle 
only  a  few  notes  and  do  not  use  the  Note  Register,  we  recommend  that,  in  entering  a 
note  in  the  Cash  Book  or  Journal,  you  give  the  person's  name,  time  to  run,  for  what 
received,  and  where  payable.  Then,  should  the  note  be  destroyed,  you  would  have  a 
complete  record  of  it.  Where  Note  Registers  are  not  kept  and  the  entry  cannot  be 
traced  by  number,  we  suggest  that,  in  posting  to  Bills  Receivable  or  Bills  Payable 
account  in  Ledger,  you  mention  the  person's  name  in  "explanatory  column"  of  Ledger. 

SIGHT  DRAFTS. 

Sight  drafts  are  not  always  considered  notes,  nor  are  they  always  entered  to  Bills 
Receivable  or  Bills  Payable.  They  are  often  used  to  transfer  accounts.  For  instance, 
a  firm  in  Clarksville,  Tenn.,  owes  you,  and  you  owe  a  firm  in  St.  Louis,  and  you  mail 
the  St.  Louis  firm  a  draft  on  the  Clarksville  firm.  Such  entries  go  neither  to  Bills 
Receivable  nor  Bills  Payable.  You  simply  debit  the  St.  Louis  firm,  because  you  give 
them  something  of  value,  and  credit  the  Clarksville  firm,  because  you  expect  them  to 
pay  it;  and  it  is  not  to  be  supposed  that  you  would  make  the  draft  unless  they  owed 
you  and  you  had  reason  to  believe  they  would  pay.  Should  they  not  pay,  the  draft 
would  of  course  be  returned  to  you  by  the  St.  Louis  firm,  when  you  would  credit  the 
St.  Louis  firm  back  and  charge  the  Clarksville  firm.  When  drafts  are  drawn  at  ten 
days  or  longer  time,  they  are  usually  carried  to  either  Bills  Receivable  or  Bills  Pay- 
able, as  the  case  may  be.     See  form  of  draft  on  page  41. 

ABBREVIATIONS  USED  IN  CORRESPONDENCE. 


Ala.,  Alabama. 

Aris.,  Arizona. 

Ark.,  Arkansas. 

Cal.,   California. 

Colo.,  Colorado. 

Conn.,  Connecticut. 

N.  Dak.,  North  Dakota. 

S.  Dak.,   South  Dakota. 

Del.,  Delaware. 

D.  C,  District  of  Columbia. 

Fla.,  Florida. 

Ga.,  Georgia. 

Id.,  Idaho. 

III.,  Illinois. 

Ind.,  Indiana. 

la.,  Iowa. 


Kan.,  Kansas. 
Ky.,  Kentucky. 
La.,  Louisiana. 
Me.,  Maine. 
Md.,  Maryland. 
Mass.,  Massachusetts. 
Mich.,   Michigan. 
Minn.,  Minnesota. 
Miss.,  Mississippi. 
Mo.,  Missouri. 
Mont.,  Montana. 
Neb.,  Nebraska. 
Nev.,  Nevada. 
N.  H.,  New  Hampshire. 
N.  J.,  New  Jersey. 
N.  Mex.,  New  Mexico. 


N.   Y.,  New  York. 

N..C.,  North  Carolina.. 

O.,  Ohio. 

Ore.,  Oregon. 

Okla.,  Oklahoma. 

Pa.  or  Penn.,  Pennsylvania. 

B.  I.,  Rhode  Island, 

S.  C,  South  Carolina. 

Tenn.,  Tennessee. 

Tex.,  Texas. 

Yt.,  Vermont. 

Ya.,  Virginia. 

Wash.,  Washington. 

W.  Ya.,  West  Virginia. 

Wis.,  Wisconsin. 

Wye,  Wyoming. 


CHANGING  BOOKS   FROM   SINGLE 
ENTRY  TO  DOUBLE  ENTRY. 

CHANGING  books  .from  Single  Entry  to  Double  Entry  should  be  done  on  the 
same  principle  as  that  of  beginning  a  new  business  entirely.  We  advise  you  to 
throw  out  all  old  accounts  such  as  Merchandise,  Expense,  Freight,  Interest  and  Dis- 
count, etc.  One  reason  for  this  is,  your  books  not  having  been  kept  Double  Entry,  you 
cannot  say  positively  that  these  accounts  are  correct.  Another  reason  is,  if  you  bring 
them  into  the  new  business,  you  will  be  compelled  to  make  additional  entries;  and  in 
the  end,  after  your  books  have  been  opened  correctly  and  put  on  a  balance,  the  net  capital 
will  be  the  same  as  if  you  had  thrown  out  at  the  start  the  accounts  above  referred  to. 

In  changing  books  from  Single  Entry  to  Double  Entry  a  most  important  thing  is 
to  credit  your  Stock  account  with  the  assets  of  the  business,  and  debit  each  account; 
then  debit  your  Stock  account  with  the  liabilities,  and  credit  each  account  with  its 
amount.  Of  course  it  is  necessary  for  you  to  make  up  a  complete  memorandum  of  all 
the  \business  before  attempting  to  make  any  entries  in  the  books. 

For  the  benefit  of  those  of  limited  experience,  we  repeat  that  Resources  (or  assets) 
are  the  things  of  value  that  you  have  on  hand,  such  as  merchandise,  cash,  fixtures, 
real  estate,  live  stock,  etc.;  also  accounts  and  notes  due  you. 

Liabilities  are  notes,  open  accounts,  etc.,  you  are  due  others. 

To  be  more  explicit,  we  would  say  that  we  would  credit  Stock  account,  and  debit 
the  following  accounts: 

Merchandise  account:  Debit  it  with  amount  of  merchandise  on  hand.  (You  must 
take  stock  in  order  to  correctly  change  from  Single  to  Double  Entry.) 

Cash  account:  Debit  it  with  amount  of  cash  on  hand. 

Fixtures  account:  Debit  it  with  amount  of  fixtures  on  hand. 

Bills  Receivable  account:  Debit  it  with  amount  of  notes  and  acceptances  due  the 
firm. 

Real  Estate  account:  Debit  it  with  amount  of  real  estate  on  hand.  (Of  course  this 
is  done  only  in  case  the  firm  owns  real  estate.) 

Live  Stock  account:  Debit  it  with  amount  of  stock  on  hand. 

Insurance  account:  Debit  it  with  amount  of  unexpired  premium  on  insurance. 

Expense  account:  Debit  it  with  amount  of  stationery,  fuel,  etc.,  on  hand. 

Sundry  account  (that  is,  each  customer's  account,  such  as  Jones's,  Smith's,  John- 
son's, etc.) :  Debit  each  with  amount  he  owes  the  firm.  If  more  than  one  stockholder 
(or  partner),  debit  their  Private  accounts,  respectively,  the  same  as  a  regular  customer, 
with  the  amounts  they  have  respectively  drawn  out  of  the  business  for  private  use. 

DEBIT    STOCK    ACCOUNT,    AND    CREDIT    THE    FOLLOWING 

ACCOUNTS. 

Bills  Payable  account:  Credit  it  with  all  notes  and  acceptances  due  others  by  the 
firm. 

Your  Creditors:  Credit  them  with  the  amounts  you  are  due  them,  respectively. 

After  making  the  above  entries  in  your  books  of  original  entry,  post  the  amounts 
to  the  Ledger,  then  take  a  Trial  Balance.  Your  Stock  account  will  show  you  your  net 
capital. 

As  a  matter  of  satisfaction,  you  could  compare  the  net  capital,  as  shown  by  this 
Stock  account,  with  all  previous  investments  in  the  business,  and  the  comparison 
would  show  you  your  gain  or  loss,  as  the  case  might  be,  since  you  started  in  business. 

5^ 


If  you  desired  your  books  to  show  this  net  gain  or  net  loss,  you  could,  if  a  gain,  debit 
Stock  account  and  credit  Profit  and  Loss;  if  a  loss,  you  could  debit  Profit  and  Loss 
account  and  credit  Stock  account.  This  would  leave  Stock  account  to  represent  the 
actual  amount  invested,  while  Profit  and  Loss  account  would  represent  either  the  loss 
or  the  gain.  After  taking  Trial  Balance,  you  could,  if  there  were  more  than  one 
partner  in  the  firm,  debit  the  Stock  account  with  their  respective  amounts,  according 
to  the  amount  each  had  previously  invested  in  the  business.  For  instance,  Jones  & 
Smith  are  partners.  Jones  had  previously  invested  $2,000;  Smith,  $1,000.  Then 
Joi  ss  would  be  entitled  to  two-thirds  of  the  net  capital;  Smith,  one-third.  After  this 
entry  is  made,  the  regular  Stock  account  would  balance,  and  Jones's  and  Smith's 
stock  accounts  would  represent  the  total  capital.  The  advantage  of  opening  only 
one  Stock  account,  until  the  books  have  been  fully  changed  from  Single  Entry  to 
Double  Entry,  is  that  it  is  much  easier  to  transfer  all  accounts  to  one  Stock 
account,  and  then  divide  this  Stock  account,  as  explained  above,  than  it  is  to  figure 
each  stockholder's  interest  in  each  article,  such  as  merchandise,  cash,  fixtures,  etc. 
Doubtless  you  see  the  point. 

We  give  below  a  set  of  books  for  the  student  to  change  front  Single  Entry  to 
Double  Entry,  and  by  making  a  careful  study  of  the  above  rules,  as  well  as  the  follow- 
ing, we  think  that  almost  any  one  can,  with  little  or  no  trouble,  change  a  set  of  books 
from  Single  Entry  to  Double  Entry. 

DURRET  &  SMITH  SET. 

We  will  suppose  that  R.  T.  Durret  and  W.  G.  Smith  began  business  on  January  1, 
19_;  R.  T.  Durret  investing  $1,000  cash,  W.  G.  Smith  investing  $500  cash.  The  books 
were  kept  Single  Entry  until  March  1,  19 — ,  when  it  was  decided  to  change  to  Double 
Entry.  We  will  suppose  that  you  are  their  bookkeeper.  Of  course  the  first  thing  to 
do  is  to  take  an  inventory  of  all  the  merchandise  and  a  complete  memorandum  of  all 
the  business.     In  doing  this  we  will  suppose  that  the  firm  has  on  hand  as  follows: 

Merchandise    , $1,200  00 

Cash    250  00 

Fixtures    (one  iron  safe)    " .' 125  00 

Unexpired  insurance  (premium)    • 18  00 

By  referring  to  the  records  and  memorandum  books   (generally 
after  much  trouble),  you  find  that  the  firm  has  real  estate — one 

lot,  No.  65,  in  Twelfth  Ward— valued  at 130  00 

One  delivery  horse  (one  bay  horse),  which  you  call  "Live  Stock," 

valued   at    95  00 

Note  on  S.  C.  Jones,  at  one  month,  dated  Feb.  15,  19 — 185  00 

W.  T,  Peck  owes  the  firm  on  open  account 83  00 

A.  M.  Pike  owes  the  firm  on  open  account 125  00 

Of  course  it  is  to  be  supposed  that  there  are  others  who  owe  the  firm,  but  the  two  above 
are  sufficient.     For  the  above  we  give  entries  below  in  our  Journal : 

ASSETS. 

Sundries,  To  Stock  account  $2,211  00 

Merchandise  account  (amount  merchandise  on  hand) .  .$1,200  00 
Cash  account   (amount  cash  on  hand — open  a  cash  ac- 
count in  Ledger)    250  00 

Insurance  account  (unexpired  premium) 18  00 

Fixtures  account  (one  iron  safe) 125  00 

Real  Estate  account  (lot  No.  65,  Twelfth  Ward) 130  00 

Live  Stock  account  (bay  horse) 95  00 

Bills  Receivable  account  (see  Note  Register) 185  00 

W.  T.  Peck,  due  on  open  account  83  00 

A.  M.  Pike,  due  on  open  account  125  00 

57 


LIABILITIES. 

You  find  that  your  firm  owes  Simmons  Hardware  Co.,  St.  Louis,  Mo.,  on  a  note 
dated  February  2,  19—,  at  sixty  days,  $200.  Your  firm  also  owes  Simmons  Hardware 
Co.,  on  open  account,  $225;  Tennessee  Manufacturing  Co.,  Nashville,  Tenn.,  $220. 
Enter  on  Journal  as  follows: 

Stock  account.  To   Sundries $    645  00 

Bills  Payable  account,  note  in  favor  Simmons  H'dware  Co.,  60  days.  $    200  00 

Simmons  Hardware  Co.,  due  them  on  open  account 225  00 

Tennessee  Manufacturing  Co.,  due  them  on  open  account 220  00 

After  posting  the  above  to  your  Ledger,  your  Trial  Balance  should  stand  as  follows: 
TRIAL  BALANCE.  DURRET  &  SMITH,  MARCH  1,  19—. 


Dr. 

Merchandise    $1,200  00 

Cash     250  00 

Insurance     18  00 

Fixtures    125  00 

Real    Estate    130  00 

Live    Stock    95  00 

Bills  Receivable   185  00 

W.  T.  Peck 83  00 

A.  M.  Pike 125  00 


$2,211  00 


Ck. 

Stock  account  $1,566  00 

Bills   Payable    200  00 

Simmons  Hardware  Co   225  00 

Tennessee  Manufacturing  Co   . .      220  00 


$2,211  00 


Note. — Net  amount  of  the  capital  is  $1,566.  R.  T.  Durret  invested  on  Jan.  1,  19 — ,  as 
above  stated,  $1,000  ;  W.  G.  Smith  invested  $500.  Tlien  does  it  not  look  reasonable  that  two- 
thirds  of  this  net  capital  should  gc  to  the  credit  of  Durret's  Stock  account,  and  one-third 
to  the  credit  of  Smith's  Stock  account?     Make  the  following  entry  in  Journal : 

DIVIDING  NET  CAPITAL. 

Stock  account.  To  Sundries  Stock  $1,566  00 

R.  T.  Durret,  Stock  account,  his  %  net  capital $1,044  00 

W.  G.  Smith's  Stock  account,  his  Vs  net  capital 522  00 

After  the  above  entry  is  made,  your  books  are  in  a  condition  for  you  to  niake  all  new 
entries.  One  who  is  not  thoroughly  familiar  with  the  principles  of  changing  books  from 
Single  Entry  to  Double  Entry  should  by  all  means  get  some  blank  paper,  make  all  the  above 
entries,  and  post  each  account  to  the  Ledger,  as  instructed  above. 


HO^A/'  TO  CATCH  THE  IDEAS. 

FIRST,  turn  to  page  27,  Jno.  F.  Draughon  Set,  and  read  all  memorandum  entries, 
one  at  a  time,  and  then  trace  them  to  our  printed  Cash  Book,  Journal,  or  Sales 
Book,  as  the  case  may  be.  These  books  you  will  find  on  the  following  pages:  Cash, 
page  6;  Journal,  page  8;  Sales,  page  9.  You  will  find  each  entry  for  this  set  made  in 
good  style,  and  by  tracing  the  entry  from  this  memorandum  to  the  books  of  original 
entry  (Cash,  Journal,  and  Sales)  you  will  gain  some  idea  as  to  the  form  of  making 
the  entries  in  your  books.  The  beginner  should  trace  each  entry  in  this  set  to  our 
printed  forms  at  least  from  six  to  twelve  times.  We  have  numbered  each  entry,  in 
order  to  assist  you  in  tracing  it.  After  you  comply  with  the  above,  open  our  printed 
Cash  Book,  page  6,  and  trace  the  entries  to  the  Ledger.  You  will  find  Ledger  pages 
given  in  Cash  Book.  After  you  finish  Cash  Book,  dispose  of  the  entries  for  each 
month  in  the  Journal  and  Sales  Book  by  the  same  plan. 

SEARCH  FOR  INFORMATION. 

In  disposing  of  a  transaction,  two  or  more  debits  are  often  required  for  one  credit, 
or  two  or  more  credits  for  one  debit.  The  question  for  you  to  decide  is.  Which  ac- 
counts are  involved  in  the  transaction?  Look  at  it  from  a  practical  standpoint;  then, 
if  you  have  any  doubt  as  to  how  to  dispose  of  an  entry,  refer  to  the  Index  and  perhaps 
you  will  be  able  to  find  the  desired  information.  You  should  by  all  means  commit  to 
memory,  as  nearly  as  possible,  the  explanations  given  herein  of  the  various  accounts. 

58 


TAYLOR  &  SONS  SET. 

WE — ^J.  C.  Taylor,  J.  L.  Taylor,  and  F.  J.  Taylor — have  this  day  formed  a  copart- 
nership, under  the  firm  name  and  style  of  Taylor  &  Sons,  to  do  a  general  mer- 
cantile business,  to  share  in  gains  and  losses,  according  to  the  amount  each  has  in- 
vested. 

J.  C.  Taylor  has  this  day  invested  cash  two  thousand  dollars. 

J.  L.  Taylor  has  this  day  invested  cash  one  thousand  dollars. 

P.  J.  Taylor  has  this  day  invested  cash  one  thousand  dollars. 

The  business  shall  be  conducted  in  Nashville,  Tenn.,  for  a  term  of  three  years.  No 
member  of  the  firm  shall  draw  out  for  private  use  more  than  seventy-five  dollars  per 
month.  J.  L.  and  F.  J.  Taylor  will  devote  their  entire  time  to  the  business,  and  each 
will  receive  a  salary  of  fifty  dollars  per  month.  J.  C.  Taylor  will  not  be  required  to 
devote  any  time  to  the  business,  more  than  as  legal  adviser,  and  will  receive  no  salary. 

J.  L,  Taylor  will  have  charge  of  the  books  and  will  sign  all  papers  for  the  firm. 

No  member  of  the  firm  shall  indorse  any  paper  for  others  without  the  consent  of  all 
the  members  of  the  firm. 

Attest:    H.  C.  Jones,  [Signed]  J.   C.    TAYLOR, 

W.  W.  Smith.  J.  L.  TAYLOR, 

This  January  1,  19—.  F.  J.  TAYLOR. 

In  this  set  we  give,  first,  a  few  entries,  then  a  form  to  follow  each  entry,  running 
all  entries  through  the  Journal,  in  order  to  save  space  in  this  book.  It  is  understood 
that  all  cash  items  should  go  into  Cash  Book  and  all  time  sales  should  go  into  Sales 
Book.  Still,  some  use  only  one  book,  which  necessitates  opening  Cash  account  in 
Ledger.  The  student  should  work  this  set  and  open  a  Cash  account  in  Ledger,  run- 
ning Cash  through  Journal,  in  order  that  he  may  know  how  to  keep  a  set  of  books  by 
this  plan.  After  he  works  the  set  by  this  plan,  he  should  work  it  using  the  Cash  Book 
and  see  that  the  results  are  the  same.    "It's  a  poor  rule  that  won't  work  both  ways." 

Note. — In  regular  business,  comments  following  each  entry  would  not  be  given  as 
we  have  done ;  but  we  are  compelled  to  take  the  inexperienced  by  the  hand,  so  to  speak,  and 
lead  him  through  carefully.  Neither  would  we  use,  in  regular  business,  the  sign  "$  ;"  we  would 
also  omit  the  "Dr."  and  "Cr."  at  top  of  columns. 

FIRST  ENTRIES,  JANUARY  1,  19—. 

(1)  J.  C.  Taylor  invested  cash  $2,000;  J.  L.  Taylor  invested  cash  $1,000;  F.  J,  Taylor  in- 
vested cash   $1,000. 

Note. — Enter  the  above  in  your  Journal.     For  form  of  doing  so,  see  following : 

FOEM. 

Dr.  Cb. 

Cash,   To    Sundries    $4,000  00 

J.  C.  Taylor,  stock   (cash  invested) $2,000  00 

J.  L.  Taylor,  stock   (cash  invested) 1,000  00 

F.  J.  Taylor,  stock   (cash  invested) 1,000  00 

Note. — When  you  post  to  Ledger,  debit  Cash  account  in  Ledger,  and  credit  each  Stock 
account.  Open  Cash  account  in  Ledger  on  the  same  principle  upon  which  you  run  Merchan- 
dise account.     For  more  explanation  on  Cash  account,  see  page  23. 

(2)  Jan.  2.  Paid  cash  for  the  following:  One  desk  for  office  use,  $17.50;  one  month's  store 
rent,  $25  ;  stationery  for  office,  $10  ;  one  bay  horse,  to  use  to  deliver  goods,  $75  ;  one  delivery 
wagon,  $50. 

Note. — Enter  the  above  in  your  Journal  as  follows: 

59 


De.  Cr. 

Sundries,   To    Cash    account $    I77  50 

Fixtures  account   (bought  one  desk  for  office  use) $    17  50 

Expense  account   (paid  one  month's  store  rent) 25  00 

Expense  account  (paid  for  stationery) 10  00 

^  „^  ,    (  Bay  horse $75  00 

Horse  and  Wagon  account   -  t^  ,.  -^  „^       ^-_  __ 

I  Delivery  wagon. ... .   50  00^    125  00 

Note. — Debit  each  account  in  Ledger,  and  credit  Cash  account  with  total. 

(3)  Jan.  4.  Bought  goods  on  time  of  Orr,  Jackson  &  Co.,  Nashville,  Tenn.,  bill  1st  Inst., 
$400;  Houston,  Meeks  &  Co.,  St.  Louis,  Mo.,  bill  1st  inst.,  $500;  Armstrong  Bros.,  Louisville^ 
Ky.,  bill  2d  inst.,  $600. 

Note. — Enter  above  in  your  Journal.     For  form,  see  the  following : 

Dk.  Cr. 

Merchandise,   To    Sundries    account $1,500  00 

Orr,  Jackson  &  Co.  (bill  1st  inst.) $    400  00 

Houston,  Meeks  &  Co.   (bill  1st  inst.) 500  00 

Armstrong  Bros,    (bill  2d  inst.) 600  00 

Note. — Debit  Merchandise  with  above,  and  credit  Orr,  Jackson  &  Co.,  Houston,  Meeks 
&  Co.,  and  Armstrong  Bros.,  respectively. 

(4.)   Jan.   5.  Returned  to  Orr,  Jackson  &  Co.,  one  case  sardines,  $4.50. 
Note. — Enter  the  above  in  your  Journal.     For  form,  see  below  : 

Dr.  Cr. 

Orr,  Jackson  &  Co.,  To $        4  50 

Merchandise    (1   case  sardines'  returned) $        4  50 

Note. — Post  to  debit  Orr,  Jackson  &  Co.,  and  credit  Merchandise  account. 

(5)  Paid  cash  for  the  following:  Gas,  $10;  stamps,  $2;  freight  from  St.  Louis,  $60. 
Note. — Enter  above  in  your  Journal.     For  form,  see  below : 

Dr.  Cr. 

Sundries,  To  Cash  account $    72  00 

Expense  account  (gas,  $10;  stamps,  $2) $    12  00 

Freight  account  (paid  freight  from  St.  Louis) 60  00 

(6)  Jan.  6.  Received  cash  as  follows:  Merchandise  cash  sales,  $60;  J.  L.  Taylor  deposited 
cash,  subject  to  his  call,  $50. 

Note. — Enter  above  in  your  Journal.     For  form,  see  below : 

Dr.  Cr. 

Cash  account,  To  Sundries   ' $    110  00 

Merchandise  account  (cash  sales)    $      60  00 

J.  L.  Taylor,  private  account    (deposited) 50  00 

(7)  Jan.  15.  Sold  the  following  merchandise  on  account:  L.  T.  Cobb,  Springfield,  Tenn., 
$60;  W.  R.  Hutchinson,  city,  $51;  W.  B.  Bates,  Shelbyville,  Tenn.,  $65;  Wm.  Jones,  city,  $200. 

Note. — In  order  to  save  space  in  this  book,  we  enter  sales  directly  in  Journal,  and  do  not 
itemize.     It  is  understood  that  all  time  sales  should  first  be  entered  in  Sales  Book,  as  was  done 
in  Sales  Book,  page  9,  of  Jno.  F.  Draughon  Set ;  then,  if  carried  through  Journal,  insert  op- 
posite each  name  in  Sales  Book  the  Journal  page,  instead  of  Ledger  page. 
Enter  above  No.  7  in  your  Journal.     See  following  for  form : 

Dr.  Cr. 

&mndries,   To   Merchandise    account $    376  00 

L.  T.  Cobb,  Springfield,  Tenn.  (S.  B.  page  — ) $      60  00 

[Sales  Book  page  should  be  given  above.] 

W.  R.  Hutchinson,  city    (218   Woodland)    51  00 

W.  B.  Bates,  Shelbyville,  Tenn   65  00 

Wm.  Jones,  city   (28  South  Cherry) 200  00 

Note. — Open  accounts  in  Ledger  and  debit  each  ;  then  credit  Merchandise  with  total. 

(8)  Jan.  18.  Received  of  L.  T.  Cobb,  on  account,  cash  $10,  and  his  note  at  thirty  days,  $50. 
Note. — Enter  the  above  in  your  Journal.     For  form,  see  entry  on  next  page. 

60 


Db.  Cr. 

Sundries,  To  L.   T.  Tobb $      60  00 

Cash  account  (L.  T.  Cobb  paid  on  account) $      10  00 

Bills  Receivable  (received  L.  T.  Cobb's  thirty-day  note)        50  00 
N.  B. — Such  explanations  as  above  are  supposed  to  appear  in  the  explanatory  columns  of 
the  Journal  and  Cash  Book,  in  actual  business.     (See  Cash  Book  and  Journal,  pages  6-8,  Jno. 
F.  Draughon  Set.) 

(9)  Bought  of  Houston,  Meeks  &  Co.,  merchandise,  $150.  Gave,  in  part  payment,  note 
we  held  on  L.  T.  Cobb — amount,  $50;  our  note  at  thirty  days,  with  interest,  $50;  balance,  $50, 
we  agreed  to  pay  in  ten  days. 

Note. — Enter  above  in  your  Journal.     For  form,  see  the  following : 

Dr.  Cr. 

Merchandise,   To    $    150  00 

Houston,  M.  &  Co.  (bought  of  them) $    150  00 

Houston,  Meeks  &  Co.,  To  sundries 100  00 

Bills  Receivable   (transferred  to  H.,  M.  &  Co.,  note 

on  L.  T.  Cobb)    50  00 

Bills  Payable    (gave  our  thirty-day  note  to  H.,  M. 

&  Co.,  on  account)    50  00 

Note. — First  debit  Merchandise,  and  credit  Houston,  Meeks  &  Co.  with  amount  merchan- 
dise received ;  then  debit  Houston,  Meeks  &  Co.  back  with  the  articles  of  value  we  gave  them. 
This  will  leave  their  account  credited  with  a  balance  of  $50  on  this  bill. 

(10)  Jan.  31.  Credit  J.  L.  and  F.  J.  Taylor,  each,  with  one  month's  salary — $50. 
Note. — Enter  the  above  in  your  Journal.     For  form,  see  below  : 

Dr.  Cr. 

Expense,    To    Sundries $    100  00 

J.  L.  Taylor,  private  account  (January  salary) $      50  00 

F.  J.  Taylor,  private  account  (January  salary) 50  00 

Note. — Post  total  to  debit  of  Expense,  and  credit  each  with  $50.  Next  post,  and  then 
take  your  Trial  Balance,  which  should  agree  with  the  following: 

Dr.  Trial  Balance,  Taylor  &  Sons,  January  31,  19^.  Cr. 


Cash,  amount  on  hand 

Fixtures 

Expense 

Horse  and  wagon 

Freight 

Merchandise 

W.  R.  Hutchinson 

W.  B.  Bates 

Wm.  Jones ' 


3,870 

50 

17 

50 

147 

00 

125 

00 

60 

00 

1,209 

50 

51 

00 

65 

00 

200 

00 

5,745 

50 

J.  C.  Taylor,  stock 

J.  L.  Taylor,  stock 

F.  J.  Taylor,  stock 

Bills  Payable 

J.  L.  Taylor,  private  account. 
F.  J.  Taylor,  private  account. 

Orr,  Jackson  &  Co 

Houston,  Meeks  &  Co 

Armstrong  Bros 


2,000 

00 

1,000 

00 

1,000 

00 

50 

00 

100 

00 

50 

00 

395 

50 

550 

00 

600 

00 

5,745 

50 

Note. — Ledger  page  should  be  given  opposite  each  account  on  Trial  Balance. 
Did  your  Trial  Balance  agree  with  ours?     If  it  did,  continue;  if  it  did  not,  find  your  error. 
For  rules  for  finding  errors,  see  page  10. 

FEBRUARY  BUSINESS. 

(11)  Feb.  18,  19 — .  Suppose  the  thirty  days  have  expired  and  Houston,  Meeks  &  Co.  return 
note  on  L.  T.  Cobb,  unpaid.  You  remember,  we  transferred  to  them  Cobb's  note,  about 
thirty  days  ago — amount,  $50. 

Note. — Enter  the  above  in  Journal.     For  form,  see  following  entry : 

Dr.  Cr. 

Bills  Receivable,  To    $      50  00 

Houston,  Meeks  &  Co.  (note  on  L.  T.  Cobb  returned 

to   us,   unpaid)     $      50  00 

Note. — You  must  remember,  after  you  read  an  entry  you  enter  it  in  your  Journal,  and 
the  solution  we  give  to  follow  each  entry  herein  is  given  only  to  show  the  form  of  making 
the  entry  in  your  Journal. 

61 


(12)  We  will  suppose  L.  T.  Cobb  comes  in  and  tells  you  that  he  will  pay  $25  cash  on  the 
above  note  and  give  his  note  at  thirty  days  for  balance^  and  allow  you  $1  as  interest,  which 
will  be  added  to  new  note. 

Note. — Enter  above  in  your  Journal.     See  form  following: 

Sundries,  To  Sundries:  Dr.  Cr. 

Cash  account  (L.  T.  Cobb,  paid  on  note) $      25  00 

Bills  Receivable   (L.  T.  Cobb,  gave  new  note) 26  00 

Interest  a*nd  Discount  (interest  added  to  Cobb's  new 

note)     $        1  00 

Bills  Receivable   (surrender  to  Cobb  his  old  note)  50  00  * 

(13)  Houston,  Meeks  &  Co.  hold  a  note  on  you  for  $50,  which  is  about  due.  You  give 
them  in  payment  a  note  you  hold  on  L.  T.  Cobb,  $26,  and  cash  $24.50,  which  includes  50  cents 
interest  on  your  note  in  favor  of  Houston,  Meeks  &  Co. 

Sundries,  To  Sundries:  Dr.  Cr. 

Bills  Payable  (paid  on  our  note  favor  H.,  M.  &  Co.)  .$      50  00 

Interest  and  Discount   (interest  on  above  note) 50 

Bills  Receivable    (transferred  L.  T.  Cobb's  note  to 

H.,  M.   &  Co.) $      26  00 

Cash    (paid  balance  in  cash  on  note  favor  H.,  M. 

&   Co.)     24  50 

(14)  Feb.  20.  W.  R.  Hutchinson  owes  you,  on  account,  $51.  You  say  to  him:  "Pay  it 
to-day,  and  we  will  allow  you  a  discount  of  $1."     See  form  below: 

Dr.  Cr. 

Sundries,  To  W.  R.  Hutchinson $      51  00 

'Cash    (W.  R.  Hutchinson  paid  on  account) $      50  00 

Interest  and  Discount   (discount  allowed  Hutchinson 
on   account) 1  00 

(15)  Suppose  J.  L.  Taylor  (one  of  the  firm)  owes  W.  B.  Bates  $60.  Bates  owes  you,  and 
gives  you  an  order  on  Taylor  for  $60.     Taylor  accepts  Bates's  order.     See  following  form : 

\       Dr.  Cr. 

J.  L.  Taylor,  Private  account,  To $      60  00 

W.  B.  Bates    (Taylor  accepts  Bates's  order  in  our 

favor) $      60  00 

(16)  W.  B.  Bates  owes  you  a  balance  on  account,  $5.  He  sends  you  cash,  $3;  butter  and 
eggs  (butter  and  eggs  you  expect  to  sell  again),  $2.     See  following  for  form: 

Dr.  Cr. 

Sundries,  To  W.  B.  Bates $        5  00 

Cash  on  account  (by  Bates) $      '3  00 

Merchandise    (produce  by  Bates) 2  00 

(17)  Suppose  you  deposit  cash  in  the  following  banks  and  desire  to  open  Bank  accounts. 
Deposit  in  City  Savings  Bank,  $600;  First  National  Bank,  $300.     See  form  below: 

Dr.  Cr 

Sundries,    To    Cash $    900  00 

City    Savings   Bank,   deposited $    600  00 

First  National  Bank,  deposited 300  00 

(18)  You  owe  Orr,  Jackson  &  Co.,  $395.50.  They  agree  that  if  you  pay  this  now  they 
will  allow  you  2  per  cent  off  the  face  amount.     See  form  below : 

Dr.  Cr. 

Orr,  Jackson  &  Co.,  To  Sundries $    395  50 

Cash  (remitted  Orr,  J.  &  Co.  on  account) $    387  59 

Interest  and  Discount  (2  per  cent  discount  on  O.,  J. 

&   Co.'s   $395.50)     7  91 

(19)  Sold  the  following  merchandise  on  account:  L.  T.  Cobb,  $250  ;  W.  R.  Hutchinson,  $30; 
W.  B.  Bates,  $250.     See  form  on  next  page. 

62 


Db.  Cr. 

Sundries,    To    Merchandise    $    530  00 

L.  T.  Cobb    (from  Sales  Book,  page  — ) $    250  00 

W.  R.  Hutchinson   (from  Sales  Book,  page  — ) 30  00 

W.  B.   Bates    (from   Sales  Book,  page  — ) 250  00 

(20)  Bought  of  A.  S.  Williams,  four  shares  Union  Bank  &  Trust  Co.  stock,  at  $125  per 
share.     Gave  in  payment  check  on  City  Savings  Bank.     See  form  below : 

Dr.  Cr. 

Stocks   and   Bonds,   To $    500  00 

City  Savings  Bank  (check  to  A.  S.  Williams  for  4 
shares  Union  Bank  &  Trust  Co.  stock,  at  $125 
per  share)    $    500  00 

(21)  Feb.  24.  Sold  to  W.  W.  Durr,  four  shares  Union  Bank  &  Trust  Co.  stock,  at  $130 
per  share.  Received  his  check  on  City  Savings  Bank — amount,  $520.  We  deposit  this  check 
In  City  Savings  Bank.     See  form  below : 

Dr.  Cr. 

City    Savings   Bank,   To $    520  00 

Stocks  and  Bonds  account  (sold  to  W.  W.  Durr, 
four  shares  Union  Bank  &  Trust  Co.  stock,  at 
$130  per  share,  and  received  check  on  C.  S.  Bank)  $    520  00 

(22)  Wm.  Jones  pays  you  cash  on  account,   $100,  and  gives  you  his  note  at  four  months 
"for  $100,  to  balance  his  account.     See  form  below: 

Dr.  Cr. 

Sundries,  To  Wm.  Jones $    200  00 

Cash    (Jones  paid   on  account) $    100  00 

Bills  Receivable  (received  Jones's  note  at  4  months) . .      100  00 

(23)  Suppose  you  transfer  Jones's  note — amount  (see  above),  $100 — to  Houston,  Meeks 
&  Co.,  to  be  applied  on  our  account — Taylor  &  Sons'.  Houston,  Meeks  &  Co.  will  accept  this 
note,  without  recourse  on  us,  for  $90.     See  form  below  : 

Dr.  Cr. 

Sundries,  To  Bills  Receivable $    100  00 

Houston,  Meeks  &  Co.    (Jones's  note) $      90  00 

Interest  and  Discount  (H.,  M.  &  Co.  accepted  Jones's 
note  on  account,  without  recourse  on  us,  at  10  per 
cent    discount)     10  00 

(24)  Bought  of  Hall  Safe  &  Lock  Co.,  Cincinnati,  one  iron  safe,  valued  at  $125,  for 
office  use.     Gave  them  our  sixty  days'  acceptance  for  same.     See  form  below : 

Dr.  Cr. 

Fixtures   account.   To    $    125  00 

Bills  Payable    (gave  our  sixty  days'  acceptance  to 

Hall  Safe  &  Lock  Co.  for  one  iron  safe) $    125  00 

(25)  Paid  freight  on  above  safe,  $10.     See  form  below: 

Dr.  Cr. 

Expense,    To    $      10  00 

Cash  (paid  freight  on  safe  from  Hall  S.  &  L.  Co.) .  $      10  00 

Note. — We  do  not  charge  this  freight  to  our  regular  Freight  account,  as  it  is  not  mer- 
chandise to  be  sold  again.     It  could  have  been  charged  as  a  part  of  purchase  price  of  safe. 

(26)  Merchandise  cash  sales  to  date,  $350.     See  form  below: 

Dr.  Cr. 

Cash,   To    $    350  00 

Merchandise    (cash  sales  to  date) $    350  00 

(27)  You  (Taylor  &  Sons)  owe  Armstrong  Bros.,  L.ouis'"ille,  Ky.,  $600.  They  say  to 
you,  "Pay  $300  now,  and  we  will  give  you  2  per  cent  off  amount  you  pay,"  and  you  pay  them 
$300,  less  2  per  cent.     See  form  on  next  page. 

63 


Armstrong   Bros.,   To    Sundries $ 

Cash    (remitted  to  Armstrong  Bros.,  on  account) . 
-     Interest  and  Discount  (2  per  cent  discount  on  $300) 
(28)  Credit  J.  L.  and  F.  J.  Taylor  with  salaries,  as  per  contract. 

Expense,    To    Sundries    $ 

J.  L.  Taylor,  Private  account   (February  salary).. 
F.  J.  Taylor,  Private  account   (February  salary) . . 


(29)    Feb.   28.   Handed  J. 
form  below : 


L.   and  F.   J. 


Dr. 

Cb 

300 

00 

V 

$ 

294 
6 

00 
00 

See  form  below 

: 

Dr. 

Cr 

100 

00 

$ 

50 
50 

00 
00 

unt, 

each 

,  cash, 

$5{ 

Dr. 

$ 

Cr 

100 

00 

See 


Sundries,  To  Cash  

J.  L.  Taylor,  Private  account   (handed  him) $      50  00 

F.  J.  Taylor,  Private  account   (handed  him) 50  00 

Now  post  and  take  your  Trial  Balance,  which  should  agree  with  the  following: 


Dr. 


Trial  Balance,  Taylor  &  Sons,  February  28,  19- 


Cr. 


Cash 

Fixtures 

Expense 

Horse  and  wagon. . . 

Freight 

Merchandise 

City  Savings  Bank . . 
First  National  Bank 

L.  T.  Cobb 

W.  R.  Hutchinson.. 
W.  B.  Bates 


2,682 

41 

142 

50 

257 

00 

125 

00 

60 

00 

331 

50 

620 

00 

300 

00 

250 

00 

30 

00 

250 

00 

5,048 

41 

J.  C.  Taylor,  stock 

J.  L.  Taylor,  stock 

F.  J.  Taylor,  stock 

Stocks  and  Bonds 

Interest  and  Discount 

Bills  Payable 

J.  L.  Taylor,  private  account 
F.  J.  Taylor,  private  account 

Houston,  Meeks  «fe  Co 

Armstrong  Bros 


2,000 

1,000 

1,000 

20 

3 

125 

40 

50 

510 

300 


5,048 


41 


Did  your  Trial  Balance  agree  with  the  above? 

Note. — In  this  set  we  have  given  quite  a  variety  of  entries ;  and  while  we  do  not  favor 
the  plan  (as  explained  elsewhere)  of  running  all  items  througli  Journal,  nevertheless  it  gives 
you  the  principles  of  Bookkeeping.     Some  firms  require  this  plan  of  keeping  books. 

Next,  close  out  this  set,  and  work  it  again  and  again,  till  you  are  thoroughly  familiar 
with  all  entries  given ;  then  you  can  make  similar  entries  without  any  trouble.  Work  it  one 
or  more  times  by  using  Cash  Book,  and  see  that  the  results  are  the  same. 

DECLARE  PROFITS. 

(1)  Take  stock,  amount  of  merchandise  on  hand,  which  we  call  "Inventory."  We  will 
suppose  we  have  goods  on  hand,  $1,250.65. 

(2)  Credit  Merchandise  account,  "By  Inventory,  $1,250.65,"  in  red  ink. 

(3)  Take  the  difference  between  the  debit  and  credit  of  Merchandise  account,  including 
Inventory,  which  is   (if  you  have  your  Merchandise  account  correct)   $919.15. 

Note. — As  we  have  shown  you  elsewhere  in  this  book  how  to  close  out  a  set  of  books  and 
how  to  make  the  transfer  of  many  accounts  directly  through  the  Ledger,  we  will  lead  you 
through  this  set  by  running  the  closing  entries  through  the  Journal. 

You  find  that  the  difference  between  debit  and  credit  of  Merchandise  account  is  $919.15, 
and  is  a  credit.  This  is  the  gross  gain  on  Merchandise  account,  which  we  transfer  to  the 
credit  of  Profit  and  Loss,  as  below : 

Dr.  Cr. 

Merchandise  account,  To   $    919  15 

Profit  and  Loss   (gross  gain  past  two  months) i 

Note. — Post   above   to   debit  of  Merchandise,   and  credit   Profit   and   Loss. 


919   15 

Then    rule   up 
For  form,   see  Merchandise 


Merchandise  account,   and  bring  Inventory  down  on  debit  side, 
account,  page  12,   "Skeleton  Ledger." 

By  referring  to  your  Trial  Balance  you  find  that  Expense  account  shows  a  debit  of  $257 
Freight  account,  a  debit  of  $60.     See  form  on  next  page. 

64 


Dr.  Cr. 

Profit   and   Loss,   To   Sundries $    317  00 

Expense  account  (past  two  months) $    257  00 

Freight  account    (past  two  months) 60  00 

Note. — Post  aWove  to  debit  of  Profit  and  Loss,  and  credit  Expense  and  Freight. 

By  again  referring  to  Trial  Balance,  you  find  that  Stocks  and  Bonds  account  shows  a 
credit  of  $20  ;  and,  as  you  have  no  stocks  on  hand,  it  is  evident  that  you  have  gained  $20  on 
this  account.  (See  explanation  on  closing  Stocks  and  Bonds  account,  page  16.)  You  also 
find  that  Interest  and  Discount  shows  a  credit  of  $3.41.     See  form  below: 

Dr.  Cr. 

Sundries,   To   Profit  and   Loss $      23  41 

Stocks  and  Bonds  (amount  gained  on  this  account) .  .$      20  00 
Interest  and  Discount  (amount   gained  on  this  account)  3  41 

Note. — Post  above  to  debit  of  Stocks  and  Bonds,  $20;  debit  Interest  and  Discount,  $3.41; 
and  credit  Profit  and  Loss  with  total,  $23.41.  Post  the  foregoing  entries  now  and  take 
another  Trial  Balance. 

After  posting  the  above,  you  find  that  Profit  and  Loss  account  shows  a  gain  of  $625.56; 
In  other  words,  the  credit  side  is  $625.56  greater  than  the  debit  side. 

Remember,  each  member  of  the  firm  is  to  share  in  loss  and  gain,  according  to  amount 
Invested  by  each.  J.  C.  Taylor  invested  $2,000  ;  J.  L.  Taylor,  $1,000  :  F.  J.  Taylor,  $1,000. 
Then  J.  C.  Taylor  will  receive  one-half  of  gain ;  J.  L.  and  F.  J.  Taylor,  one-fourth  each.  See 
form  below  : 

Dr.  Cr. 

Profit  and  Loss,  To  Sundries   $    625  56 

J.  C.  Taylor,  stock  (his  %  gain  past  two  months) .  $    312  78 

J.  L.  Taylor,  stock  (his  %  gain  past  two  months) . .  156  39 

F.  J.  Taylor,  stock  (his  Vi  gain  past  two  months) . .  156  39 

Note. — Post  the  above   $625.56   to   debit  of  Profit  and  Loss,   and  credit  each  member   of 

firm  on  Stock  account  with  his  gain. 

In  regular  business  we  would  now  rule  up  in  our  Ledger  all  accounts  that  balance,  then 
continue  business ;  but  as  we  want  to  explain  fully  how  to  close  out  all  accounts,  and  in  order 
that  you  may  work  this  set  over  several  times,  we  will  proceed  to  close  out  as  below. 

Next,  by  again  referring  to  your  Trial  Balance  you  find  that  J.  L.  Taylor's  Private  ac- 
count shows  a  credit  of  $40,  and  F.  J.  Taylor's  Private  account  a  credit  of  $50.  Suppose  you 
transfer  the  credits  to  their  Stock  accounts.     See  form  below : 

Dr.  Cr. 

Sundries,  To  Sundries: 

J.  L.   Taylor,   Private  account $      40  00 

F.  J.  Taylor,  Private  account 50  00 

J.  L.  Taylor,   Stock  account $      40  00 

F.  J.  Taylor,   Stock  account 50  00 

(To  transfer  credit  of  their  Private  accounts  to  credit  of  their  Stock  accounts.) 
Note. — Post  above  to  the  debit  of  each  Private  account ;  then  credit  their  Stock  accounts. 

Suppose  you  sell  to  A.  W.  Watkins,  for  cash,  as  follows :  Your  stock  of  merchandise, 
$1,250.65;  fixtures,  $142.50;  horse  and  wagon,  $125.     See  form  below: 

Dr.  Cr. 

Cash,  To  Sundries    $1,518  15 

Merchandise    account    (sold    stock    merchandise    to 

A.  W.  Watkins)    $1,250  65 

Fixtures   (sold  fixtures  to  A.  W.  Watkins) 142  50 

Horse  and  wagon   (sold  horse  and  wagon  to  A.  W. 

Watkins)     125  00 

Note. — Debit  Cash  account  with  above  total,  $1,518.15,  and  credit  each  account  with  its 
amount. 

Next,  suppose  that  your  customers  pay  you  their  accounts  in  full,  and  you  check  your 
money  out  of  Bank.     See  amounts  on  Trial  Balance,  and  form  on  next  page. 

5  65  . 


Dr.  Cr. 

Cash   account,   To   Sundries    $1,450  00 

City    Savings   Bank    (checked    out).. $    620  00 

First  National   Bank    (checked   out) 300  00 

L.  T.  Cobb   (paid  on  account) 250  00 

W.  R.   Hutchinson    (paid   on   account) 30  00 

W.  B.  Bates    (paid  on  account) 250  00 

Note. — Debit  Cash  with  above  total,  and  credit  each  account. 

Next,  by  referring  to  Trial  Balance,  you  find  that  Bills  Payable  shows  a  credit  of  $125. 
Remember,  you  bought  of  Hall  Safe  &  Lock  Co.  one  iron  safe,  $125,  and  gave  them  your 
note,  and  credited  Bills  Payable.     You  now  pay  the  note.     See  form  below : 

Dr.  Cr. 

Bills    Payable,    To    $    125  00 

Cash   (paid  note  in  favor  of  Hall  Safe  &  Lock  Co.)  $    125  00 

.  Next,  by  again  referring  to  credit  side  of  Trial  Balance,  you  find  you  owe  Houston, 
Meeks  &  Co.  $510;  Armstrong  Bros.,  $300.  Now,  suppose  you  pay  them  in  cash,  oee 
form  below : 

Dr.  Cr. 

Sundries,  To  Cash  account   $    810  00 

Houston,  Meeks  &  Co.   (sent  them  cash) $    510  00 

Armstrong   Bros,    (sent   them    cash) 300  00 

Note. — For  above,  debit,  in  Ledger,  Houston,  Meeks  &  Co.  and  Armstrong  Bros,  with  their 
respective  amounts,  and  credit  Cash. 

Next,  by  referring  to  your  Ledger,  you  find  that  all  accounts  balance  except  the  Stock 
accounts  of  the  members  of  the  firm.  They  show  credits  as  follows:  J.  C.  Taylor,  $2,312.78; 
J.  L.  Taylor,  $1,196.39';  F.  J.  Taylor,  $1,206.39.  Now,  suppose  you  pay  them  off.  By  re- 
ferring to  your  Cash  account,  in  Ledger,  you  find  you  have  just  enough  (no  more,  no  less)  to 
pay  them.     You  hand  each  his  amount,  and  make  the  entries  as  follows : 

Dr.  Cr. 

Sundries,  To  Cash $4,715  56 

J.  C.  Taylor,  stock   (handed  him) $2,312  78 

J.  L.  Taylor,  stock   (handed  him) 1,196  39 

F.  J.  Taylor,  stock   (handed  him) 1,206  39 

Note. — Post  above  to  debit  of  each  account,  and  credit  Cash  account  with  total ;  then  all 
accounts  in  this  set  will  balance. 

Next,  beginning  with  first  account  in  your  Ledger  in  this  set,  rule  up  each  account. 

]SroTB. — In  ruling  an  account,  always  rule  first  the  side  that  extends  lower  down  the 
column ;  then  you  can  rule  the  other  side  on  line  with  the  same.  ( See  form  for  ruling, 
pages    2,  12.) 

After  you  rule  up  all  accounts  as  instructed,  carefully  read  and  study  the  different  rules 
and  explanations  given  throughout  this  book;  then  work  Taylor  &  Sons  Set  again  and 
again,  as  directed. 


ee 


FORMS  of  NOTES,  BILLS,  Etc. 

NOTES. 

[An  Individual  Note.] 

Nashville,  Tenn.,  January  22,  19—, 
Thirty  days  after  date,  I  promise  to  pay  John  Mcintosh,  or  order,  two  hundred 
and  fifty  dollars.     Value  received.  William  Tompkins. 

[A  Joint  Note.] 

Nashville,  Tenn.,  January  22,  19 — . 
Thirty  days  after  date,  vv^e  promise  to  pay  John  Mcintosh,  or  order,  two  hundred 
and  fifty  dollars.     Value  received.  William  Tompkins, 

James  Salley. 

[A  Joint  and  Separate  Note,  also  called  a  Joint  and  Several  Note.] 

Nashville,  Tenn.,  January  22,  19 — . 
Thirty  days  after  date,  we,  or  either  of  us,  promise  to  pay  John  Mcintosh,  or  or- 
der, two  hundred  and  fifty  dollars.    Value  received.  William  Tompkins, 

James  Salley. 

Note. — In  above  note  the  words  "jointly  and  severally"  are  frequently  used  instead  of 
the  words  "we,  or  either  of  us." 

[Interest-Bearing  Note.] 

Nashville,  Tenn.,  January  22,  19 — , 
Thirty  days  after  date,  I  promise  to  pay  John  Mcintosh,  or  order,  two  hundred 
and  fifty  dollars,  with  interest.     Value  received.  William  Tompkins. 

Note. — When  no  rate  of  interest  is  specified,  as  in  the  above  case,  the  legal  rate  is  under- 
stood. If  a  rate  of  interest  other  than  the  legal  rate  is  to  be  paid,  it  must  be  specified.  For 
instance,  if  ten  per  cent  interest  is  agreed  upon,  it  would  be  properly  specified  by  writing 
after  the  words  "with  interest,"  in  the  above  form,  the  words  "at  the  rate  of  ten  per  cent 
per  annum."  The  laws  of  some  States  declare  a  note  void  if  a  rate  of  interest  in  excess  of 
the  legal  rate  is  charged. 

[A  Note  Drawing  Annual  Interest.] 

Nashville,  Tenn.,  January  22,  19 — . 
Eight  years  after  date,  I  promise  to  pay  John  Mcintosh,  or  order,  two  hundred 
and  fifty  dollars,  with  interest  at  the  rate  of  ten  per  cent  per  annum,  payable  annually. 
Value  received.  William  Tompkins. 

Note. — Remember,  the  legal  effect  of  the  words  "payable  annually,"  in  above  form.  By 
their  use  the  interest  is  to  be  paid  at  the  end  of  each  year  from  date  of  note.  If  not  paid, 
the  note  becomes  interest-bearing,  and  continues  to  draw  interest  until  paid ;  whereas,  if  these 
words  had  been  omitted  from  the  note,  no  part  of  the  interest  would  be  payable  until  the 
principal  is  due,  whicli  would,  in  the  end,  make  considerable  difference  in  the  total  amount 
of  interest  and  principal. 

[Duebill  Payable  on  Demand.] 

Nashville,  Tenn.,  January  22,  19 — . 
Due  John  Jones,  on  demand,  fifty  dollars.  James  Monroe. 

FULL  EXPLANATIONS. 

For  full  explanations  of  Commercial  Paper,  Contracts,  etc.,  see  Legal  Adviser  De- 
partment of  "Draughon's  Progressive  Bookkeeping  and  Legal  Adviser." 


67 


GENERAL  QUESTIONS. 

WE  give  below  some  questions  to  be  answered  by  students  taking  lessons  by  mail, 
when  called  on  to  do  so.  The  student  who  has  no  teacher  can  use  these  ques- 
tions as  a  teacher  by  first  reading  a  question,  then  writing  his  answer,  before  referring 
to  the  explanation.  Following  almost  every  question  is  given  the  page  on  which  seme 
valuable  information  can  be  gained  regarding  that  question.  The  student  should 
give  an  illustration"  for  each  question  asked.  By  answering  questions  by  number, 
thus,  "Lesson  4,  question  5,"  it  will  not  be  necessary  to  write  the  question. 

(3)   Suppose  that  you  have  an  account 
See  page      in  your  Ledger  with  Simmons  Hardware 


(1) 


LESSON  1. 

What  is   Bookkeeping? 


15. 


(2)  What  is  posting?     See  page  28. 

(3)  What  are  the  fundamental  princi- 
ples of  Double-Entry  Bookkeeping?  See 
page  15. 

(4)  What  are  the  principal  books  used 
in  Bookkeeping?     See  pages  22,  23. 

(5)  Which  are  called  "books  of  original 
entry?"     See  pages  22,  23. 

(6)  What  entries  are  made  in  the  Cash 
Book?     See  page  23. 

(7)  What  entries  are  made  in  the 
Journal?     See  page  23. 

(8)  What  entries  are  made  in  the 
Sales  Book?     See  page  23. 

(9)  What  book  is  considered  the  "ren- 
dezvous" for  all  accounts?     See  page  22. 

(10)  Who  are  our  debtors,  and  when 
do  we  debit  and  credit  them?  See  page 
20. 

(11)  When  do  we  credit  our  creditors 
(persons  we  owe),  and  when  do  we  debit 
our  creditors?    See  page  20. 

LESSON  2. 

(1)  Which  is  the  debit  side  of  the 
Ledger  account,  and  which  is  the  credit 
side?  22.  (The  number  following  each 
question  refers  to  the  page  on  which  you 
will  find  information  in  regard  to  the 
matter  about  which  question  is  asked.) 

(2)  Suppose  that  you  are  in  the  mer- 
cantile business,  and  you  have  an  ac- 
count in  your  Ledger  with  John  Smith, 
and  the  debit  side  shows  a  debit  of  $10 
and  the  credit  side  shows  a  credit  of  $5: 
does  John  Smith  owe  you,  or  do  you  owe 
him,  and  how  much  is  he  due  3'ou,  or 
how  much  are  you  due  him?    29. 


Co.,  St.  Louis,  Mo.,  and  you  find  entered 
on  the  credit  side  $75  and  on  the  debit 
side  $25:  how  much  are  you  due  them? 
29. 

(4)  What  is  a  Trial  Balance?    4,  22. 

(5)  Give  some  explanation  about  tak- 
ing a  Trial  Balance.    4. 

LESSON  3. 

(1)  Do  bookkeepers,  as  a  rule,  use  a 
Memorandum  Book,  and  when  can  it  be 
used  to  good  advantage?     24. 

(2)  Tell  how  you  post  an  item  from 
the  Cash  Book  to  the  Ledger.  For  in- 
stance, you  find  entered  on  the  left-hand 
— debit — side  of  Cash  Book,  "John  Jones, 
$50,"  and  you  desire  to  post  this  amount 
to  the  Ledger:  how  is  it  done,  and  to 
which  side  of  the  Ledger  account  is  it 
posted?    23,  28. 

(3)  Tell  something  about  paging,  and 
why  you  in  posting  place  the  Ledger  page 
in  the  book  of  original  entry  and  the  page 
of  the  book  of  original  entry  in  the  Ledg- 
er.    26,  28,  34. 

(4)  When  do  you  credit  Proprietor's 
Stock  account,  and  when  do  you  debit 
Proprietor's  Private   account?     15. 

(5)  What  are  resources  (or  assets), 
and  what  are  liabilities?     15. 

(6)  What  are  the  fundamental  princi- 
ples of  Double-Entry  Bookkeeping?     15. 

(7)  When  do  you  debit  or  credit  Cash 
account?     23,  26. 

(8)  In  using  a  Cash  Book,  where  do 
you  find  your  Cash  account?     23. 

(9)  Tell  what  you  know  about  bal- 
ancing Cash  account  in  Cash  Book.     29. 


68 


LESSON  4. 

(1)  What  are  the  advantages  of  using 
a  Cash  Book,  and  how  is  time  saved  by 
using  it?    23. 

(2)  When  do  you  use  red  ink?    25. 

(3)  How  often  do  you  usually  take  a 
Trial  Balance,  and  on  what  day  of  the 
month?     46. 

(4)  When  do  you  debit  and  credit 
Profit  and  Loss?     16. 

(5)  Name  five  or  more  accounts  that 
are  closed  into  Profit  and  Loss.     16. 

(6)  Into  what  account  do  you  close 
Profit  and  Loss?    26. 

(7)  Name  some  of  the  articles  that  you 
should  charge  to  Fixtures  account,  and 
name  an  instance  where  Fixtures  should 
receive  a  credit,  and  how  Fixtures  account 
is  closed  at  the  time  you  declare  profits. 
16. 

(8)  When  do  you  debit  Expense  ac- 
count?   17. 

(9)  When  do  you  credit  Expense  ac- 
count, and  into  what  account  is  it  closed, 
and  how  do  you  make  the  transfer?    17. 

(10)  Name  some  entries  that  should  be 
charged  to  Freight  account,  and  when  do 
you  credit  Freight  account,  and  into  what 
account  is  Freight  account  closed?     17. 

(11)  Give  a  case  where  it  is  almost 
necessary  to  have  two  Freight  accounts. 
17. 

(12)  When  do  you  debit  or  credit  In- 
terest and  Discount  account,  and  into 
what  account  is  Interest  and  Discount 
closed?    17. 

(13)  At  what  season  of  the  year  do  you 
close  Freight  account,  Interest  and  Dis- 
count account.  Expense  account,  etc.? 
16-20. 

LESSON  5. 

(1)  Should  the  firm  desire  to  open  Sal- 
ary account,  give  an  entry  that  should  be 
charged  to  Salary  account,  and  into  what 
account  is  Salary  account  closed?     18. 

(2)  When  do  you  debit  Bills  Receiva- 
ble account?     18. 

(3)  When  do  you  credit  Bills  Receiva- 
ble account?     18. 

(4)  With  what  should  the  difference 
between  the  debit  and  credit  of  Bills  Re- 
ceivable account  agree?    54. 

(5)  Do  you  close  any  part  of  Bills  Re- 


ceivable  account    into    Profit    and   Loss? 
18. 

(6)  When  do  you  credit  Bills  Payable 
account,  and  when  do  you  debit  Bills 
Payable  account?     19. 

(7)  Is  any  part  of  Bills  Payable  ac- 
count closed  into  Profit  and  Loss?    19. 

(8)  Give  the  difference  between  Bills. 
Receivable  and  Bills  Payable  accounts. 
19. 

(9)  When  do  you  debit  or  credit  Live 
Stock  account?    Tell  how  it  is  closed.   19. 

(10)  When  do  you  debit  and  when  do 
you  credit  Movable  Property  account,  and 
how  is  it  closed?    19. 

(11)  When  do  you  debit  and  when  do 
you  credit  your  Bank  account?    19,  20. 

(12)  Is  it  absolutely  necessary  to  open 
an  account  in  your  ledger  with  your 
bank?  If  you  do  not  open  account  in 
your  Ledger  with  your  bank,  how  will 
you  keep  a  record  of  the  cash  in  the 
bank?    19,  20. 

LESSON  6. 

(1)  When  do  you  debit  and  when  do 
you  credit  Cotton  account,  and  into  what 
account  do  you  close  Cotton  account?    20. 

(2)  In  what  column  of  your  Cash  Book, 
Journal,  and  Sales  Book  should  a  full 
explanation  of  the  entries  appear?     25. 

(3)  How  should  you  classify  accounts? 
24. 

(4)  How  often  do  firms  usually  close 
their  books,  and  what  do  we  mean  when 
we  speak  of  "closing  books?"   21,  37. 

(5)  What  is  the  first  thing  to  do  when 
you  receive  cash?    53. 

(6)  Which  is  the  debit  side  of  your 
Cash  Book,  and  which  is  the  credit  side? 

22,  23. 

(7)  What  advantage  is  there  in  posting 
directly  from  the  Sales  Book  to  the 
Ledger,  instead  of  journalizing  your  sales? 

23,  24. 

(8)  What  account  do  you  enter  on  your 
Trial  Balance  first,  and  where  do  you 
find  that  account?    4,  5. 

(9)  On  which  side  of  the  Trial  Balance 
do  you  enter  your  cash?    4,  5. 

(10)  On  which  side  of  your  Trial  Bal- 
ance do  you  enter  the  debits  of  your 
Ledger,  and  on  which  side  of  your  Trial 
Balance  do  you  enter  the  credits  of  your 
Ledger?    4,  5. 


69 


(11)  In  writing  the  debits  and  credits 
on  your  Trial  Balance,  do  you  enter  from 
your  Ledger  the  total  debits  and  credits 
on  the  Trial  Balance,  or  do  you  take  the 
difference  in  the  Ledger  accounts  and  en- 
ter the  difference  on  the  Trial  Balance, 
and  on  which  side  of  the  Trial  Balance 
should  this  difference  appear?    4. 

(12)  Give  an  error  that  a  Trial  Bal- 
ance would  not  detect.     4. 

(13)  In  declaring  profits,  is  it  neces- 
sary to  take  an  Inventory  of  merchan- 
dise?   33. 

(14)  On  which  side  of  Merchandise  ac- 
count do  you  enter  the  Inventory,  and 
after  entering  it  on  the  side  you  name, 
do  you  leave  it  there,  or  do  you  bring  it 
down  on  the  debit  or  credit  side  of  Mer- 
chandise account?     33. 

(15)  Give  the  difference  between  Bills 
Receivable  and  Bills  Payable  Registers. 
54,  55. 

LESSON  7. 

(1)  With  what  account  should  the  to- 
tal amount  of  the  unpaid  notes  and  ac- 
ceptances in  Bills  Receivable  Register 
agree?    54. 

(2)  With  what  account  should  the  un- 
paid notes  and  acceptances  in  Bills  Pay- 
able Register  agree?    54. 

(3)  If  you  draw  a  sight  draft  on  one 
of  your  customers  in  favor  of  one  of  your 
creditors  and  mail  it  to  your  creditor,  is 
either  Bills  Receivable  or  Bills  Payable 
account  affected  by  the  entry,  and  how 
do  you  make  the  entry?     55. 


(4)  In  making  a  Journal  entry,  in  what 
column  do  you  stop  the  amounts  to  be 
posted  to  the  debit  side  of  the  Ledger, 
and  in  what  column  do  you  stop  the 
amounts  to  be  posted  to  the  credit  side 
of  the  Ledger?    8. 

(5)  Must  the  footings  of  the  debit  and 
credit  columns  of  your  Journal  agree?    8. 

(6)  What  advantage  is  there  in  giving 
in  your  Sales  Book  a  complete  record  of 
the  sales?  Give  some  of  the  rules  that 
should  be  fully  complied  with  while  mak- 
ing an  entry  of  time  sales  in  your  Sales 
Book.     31. 

(7)  What  account  do  you  credit  with 
the  total  time  sales  from  the  Sales  Book 
at  the  end  of  the  month?    28. 

(8)  How  do  you  journalize  time  sales 
from  the  Sales  Book?    21. 

(9)  Does  Freight  account  ever  receive 
a  credit  before  it  is  closed  into  Profit  and 
Loss  or  Merchandise?     If  so,  when?     17. 

(10)  What  is  the  difference  between  a 
note  and  an  acceptance?     26. 

(11)  Is  it  best  to  prove  "cash"  every 
day?     If  so,  why? 

(12)  In  which  book  do  you  enter  all 
the  time  sales?.    23. 

(13)  In  which  book  do  you  enter  all 
cash  transactions?     23. 

(14)  In  which  book  do  you  enter  goods 
you  buy  on  time,  all  cross  entries,  etc.? 
23. 

(15)  To  which  book  are  all  of  these 
entries  posted?  .22. 


THE  COURSE  OUTLINED. 

GENERAL  ADVICE  TO  TEACHERS  AND  OTHERS  STUDYING  THIS  BOOK. 

1.  A  person  who  has  only  a  limited  knowledge  of  Bookkeeping  should,  on  receiving 
this  book,  first  read  several  times  "General  Information,"  pages  15  to  26.  The  various 
articles  under  this  heading  tell  how  to  open,  close,  debit,  and  credit  almost  all  ac- 
counts in  business. 

2.  After  complying  with  the  above  advice,  follow  that  given  in  articles  on  page  58, 
"How  to  Catch  the  Ideas"  and  "Search  for  Information."  After  reading  these  articles 
several  times,  begin  on  page  27,  "Memorandum,  Jno.  F.  Draughon  Set,"  and  trace  the 
Memorandum  Entries  to  our  Cash  Book,  Journal,  and  Sales  Book,  as  directed;  trace 
also  the  entries  from  the  Cash  Book,  Journal,  and  Sales  Book  to  the  Ledger,  as 
directed. 

3.  The  student  will  find  in  Cash  Book,  Journal,  and  Sales  Book  the  Ledger  page 
number,  which  he  can  use  as  a  guide  to  trace  these  entries  to  the  Ledger.  After 
tracing  the  entries  as  directed,  he  should  begin  to  make  the  entries  in  his  blank 

70 


books  from  the  Memorandum  Entries  we  have  given,  beginning  with  "Jno.  F.  Draughon 
Set,"  page  27. 

4.S  After  reading  a  Memorandum  entry,  but  before  trying  to  make  the  entry  in  his 
book,  the  student  should  refer,  "by  number,"  to  our  Cash  Book,  Journal,  or  Sales 
Book,  as  the  case  may  be,  in  order  to  learn  the  form  of  making  the  entry  in  his  book. 

5.  After  the  student  works  several  times  the  set  known  as  the  "Jno.  P.  Draughon 
Set"  above  referred  to,  he  should  again  read  "General  Information,"  pages  15-26;  in 
fact,  he  should  read  it  often  while  working  out  the  set.  Reading  it  will  assist 
the  student  to  work  out  the  set  correctly,  and  even  when  he  is  able  to  work 
it  out  correctly,  he  will  find  that  his  newly  acquired  knowledge  will  greatly  aid  him 
in  comprehending  the  matter  under  the  heading  "General  Information;"  in  other 
words,  his  work  and  the  matter  on  pages  15-26  will  be  found  to  be  reciprocally  helpful. 

6.  After  working  the  Jno.  F.  Draughon  Set  twice  from  the  printed  forms — which 
may  be  used  as  a  guide — the  student  should  work  it  the  third  time  (if  not  possible 
to  do  so  the  second  time)  without  referring  to  the  printed  forms.  He  should  follow 
this  rule  in  working  every  set  in  this  book,  and  continue  working  the  set  over  and 
over  until  he  can  and  does  work  it  correctly  without  referring  to  any  of  his  previous 
work  or  any  instruction  that  may  be  given  in  this  book  or  by  the  teacher  as  to  how 
entries  should  be  made  or  the  forms  to  be  followed  in  making  the  entries. 

7.  When  a  student  is  confident  that  he  can  work  the  Jno.  P.  Draughon  Set 
according  to  instructions,  and  has  done  so,  without  referring  to  the  printed  forms  or 
any  of  his  previous  work  as  a  guide,  thereby  relying  entirely  on  his  own  judgment, 
the  teacher  should  allow  him  to  pass,  for  the  present,  to  another  set. 

Mckinley  &  bryan  set. 

8.  After  the  student  completes  the  Jno.  F.  Draughon  Set,  as  directed  in  the  fore- 
going paragraphs,  he  should  turn  to  page  45,  where  he  will  find  Memorandum  Entries 
for  the  McKinley  &  Bryan  Set.  He  should  first  spend  considerable  time  in  tracing 
these  entries  to  our  printed  Cash  Book,  Journal,  and  Sales  Book,  reading  the  explana- 
tions as  directed;  then  trace  from  the  books  of  original  entry  (Cash  Book,  Sales  Book, 
and  Journal)  all  entries  to  the  Ledger.  After  tracing  these  different  entries  until  he 
has  a  good  insight  into  the  work,  he  should  begin  to  make  the  entries  from  our 
printed  Memorandum  Book  for  McKinley  &  Bryan  Set,  beginning  on  page  45;  take 
Trial  Balance  each  month,  and  close  out  the  books  as  directed  on  the  Jno.  F.  Draughon 
Set.  The  student  should  also  work  out  the  McKinley  &  Bryan  Set  twice  without  as- 
sistance or  reference  to  his  former  work;  and  an  absolutely  sure  way  to  test  his 
ability  to  do  this  is  to  sew  up  his  blank  books.  If  he  can  work  this  set  in  this  manner, 
he  will  have,  with  what  he  has  already  gained  by  a  careful  study  of  this  book,  a 
better  knowledge  of  Bookkeeping  than  can  be  obtained  at  many  so-called  "business 
colleges." 

9.  The  teacher  should  have  the  student  to  draw  up  Commercial  Paper,  as  directed 
on  page  11.  On  page  56  will  be  found  instruction  on  "Changing  Books  from  Single 
Entry  to  Double  Entry."  The  student  should  duplicate  this  work  in  his  books 
of  original  entry,  post  the  amounts  to  his  Ledger,  take  Trial  Balance,  etc.  The  in- 
struction and  the  illustrations  we  have  given  on  changing  books  from  Single  Entry 
to  Double  Entry  are  complete;  and  we  think  that  if  the  student,  after  carefully  study- 
ing these,  will  make  the  entries  in  his  books  and  post  the  same  as  directed,  he  will  be 
competent  to  change  an  ordinary  set  of  books  from  Single  Entry  to  Double  Entry — 
something  that  many  bookkeepers  cannot  do  correctly. 

TAYLOR  &  SONS  SET. 

10.  On  page  59  are  Memorandum  Entries  for  a  set  styled  "Taylor  &  Sons  Set." 
The  student  should  work  out  this  set  a  few  times  as  directed,  then  work  it  one  or 
more  times  using  the  Cash  and  Sales  Books,  and  see  that 'the  results  obtained  are  the 

71 


game  as  when  he  made  all  his  entries  through  the  Journal.  He  could  formulate 
certain  entries  in  Sales  Book,  itemizing  each  article  so  that  the  aggregate  would  te  the 
sum  of  the  items  we  have  given;  hence,  the  results  would  not  be  changed.  Again,  he 
should  work  the  Jno.  F.  Draughon  and  McKinley  &  Bryan  Sets  once  or  twice,  using 
only  two  books — namely,  Journal  and  Ledger;  this  would  necessitate  opening  a  Cash 
account  in  the  Ledger.  "While  we  do  not  indorse  the  practice  of  running  the  time 
sales  and  cash  entries  through  the  Journal,  the  students  in  doing  so  are  learning  the 
principles  of  Double-Entry  Bookkeeping  just  the  same,  and  it  gives  them  a  good  op- 
portunity to  branch  off  from  our  guide,  knowing  that  the  results  must,  in  the  end,  be 
the  same. 

GENERAL  ADVICE. 

11.  After  the  student  begins  to  work  out  a  set  from  a  Memorandum  Book,  he 
should  read  the  entries  carefully  and  determine,  before  looking  at  the  printed  form, 
how  to  make  the  entry.  He  should,  before  passing  a  set,  be  able  to  make  every  entry 
in  it  without  referring  to  our  guide  or  to  his  previous  work.  His  knowledge  can  be 
easily  tested  by  following  our  suggestions  in  the  foregoing  paragraphs — by  sewing  up 
his  books,  etc.  As  to  the  number  of  times  each  set  should  be  worked,  that  will  depend 
upon  the  student's  experience  and  aptitude.  However,  we  do  not  think  a  student 
who  has  had  no  experience  in  keeping  books  should  be  passed  on  the  different  sets 
without  working  each  of  them  at  least  from  four  to  six  times;  in  fact,  he  should  work 
each  of  them  once  or  twice  after  he  feels  confident  that  he  understands  them  thor- 
oughly. This  will  give  him  permanent  possessicn  of  a  knowledge  which  is  more  or 
less  transitory  with  working  each  set  only  a  time  or  two. 

MORE  ABOUT  TRACING  ENTRIES. 

12.  As.  stated  elsewhere,  we  have  given  Memorandum  Entries  in  this  book,  and 
from  these  Memorandum  Entries  we  have  made  the  entries  in  good  style  in  other 
parts  of  the  book  as  a  guide  for  the  student.  In  tracing  these  entries  the  student 
will  bear  in  mind  that  he  must  find  one  or  more  debits  for  each  credit,  and  one  or 
more  credits  for  each  debit. 

QUESTIONS. 

Elsewhere  we  have  given  questions  for  the  teacher  to  ask  the  student;  indeed,  the 
questions  will  serve  as  a  teacher  for  the  student.  The  student  can  read  the  questions, 
write  his  explanations,  and  then  refer  to  the  page  number  or  numbers  following  his 
questions,  where  he  will  find  answers.  Under  this  plan  the  questions  serve  well  as 
a  teacher. 

SEW  UP  BOOKS. 

As  affording  an  excellent  test  of  the  student's  knowledge,  we  have  suggested,  and 
we  repeat  the  suggestion,  that  the  student  sew  up  his  books  of  original  entry,  that  he 
may  refrain  from  referring  to  them  while  working  a  set  the  last  few  times.  He  should 
also  sew  up  his  Trial  Balance,  or  destroy  it.  It  is  almost  impossible  for  a  student  to 
resist  the  temptation  to  refer  to  his  previous  work  or  to  our  printed  books,  if  he  is  in 
doubt  as  to  how  to  dispose  of  an  entry  or  if  he  makes  an  error  in  the  Trial  Balance. 

STILL  BETTER  PLAN. 

A  better  plan  would  be  for  the  student  to  copy  the  Memorandum  Entries,  omitting 
the  instructions,  after  working  a  set  a  few  times;  then  lay  aside  his  text-book  and 
previous  work,  and  work  the  set  from  his  copy  of  entries.  Of  course  his  work  in 
that  case  should  agree  with  his  former  work. 


72 


POINTERS  WORTH   CONSIDERING. 

IT  would  be  almost  impossible  for  a  school  to  teach  all  the  different  forms  used 
in  keeping  books.  With  even  a  two-year  course  the  students  would  be  unable  to 
familiarize  themselves  with  all  the  forms  used  in  various  lines  of  business. 

One  might  write  a  text-book  containing  ten  times  as  many  different  forms  for 
keeping  books  as  are  given  in  all  other  Bookkeeping  text-books  combined,  yet  it  would 
contain  less  than  half  of  the  forms  used  in  different  lines  of  business. 

Writers  of  text-books  on  Bookkeeping  make  their  greatest  mistake  in  giving  too 
many  different  forms  for  keeping  books.  In  their  zeal  for  multiplicity  they  sacrifice 
the  true  principles  of  Bookkeeping;  and  in  attempting  to  teach  these  numerous  forms 
the  teacher  experiences,  of  course,  great  difficulty,  not  to  speak  of  the  confusion 
among  the  students,  who  are  doing  well  if  they  can  obtain  even  a  slight  knowledge 
of  each  form. 

Thousands  believe  that  Draughon's  Practical  Business  Colleges  teach  more  real 
Double-Entry  Bookkeeping  in  THREE  months  than  other  business  colleges  teach  in 
SIX  months.  They  believe  this  because  they  know  that  Draughon's  text-books  laj 
the  proper  foundation  upon  which  a  thorough  knowledge  of  Double-Entry  Bookkeeping 
may  be  built.  The  principles  of  Double-Entry  Bookkeeping  are  the  same  the  world 
over,  and  when  one  has  once  learned  the  true  principles  of  Bookkeeping,  he  can 
adapt  himself  to  any  set  of  books,  regardless  of  the  various  forms  used. 

Scarcely  any  two  firms  use  exactly  the  same  forms  for  keeping  books,  even  in  the 
same  line  of  business.  If  the  bookkeeper  has  laid  the  proper  foundation  and  is  pro- 
gressive, he  can,  in  any  line  of  business,  originate  forms,  especially  adapted  to  his 
particular  line  of  business,  which  will  save  from  10  to  50  per  cent  in  his  work. 

VARIOUS  METHODS  EMPLOYED. 

The  different  forms — some  term  them  "systems" — of  Bookkeeping  are  too  numerous 
to  mention.  It  is  frequently  the  case  that  two  or  more  books  of  original  entry  are 
combined,  so  as  to  save  time  in  posting,  etc.  The  most  popular  combination  of  this 
character  is  the  Cash  Book- Journal,  having  several  columns.  In  "Draughon's  Double 
Entry  Made  Easy"  there  is  an  excellent  example  of  this  combination. 

Other  labor-saving  devices  are  the  Loose-leaf  Ledger,  the  Card  System,  the  Dupli- 
cating Sales  Book,  etc.  In  "Draughon's  Progressive  Bookkeeping  and  Legal  Adviser" 
and  "Draughon's  Double  Entry  Made  Easy"  we  have  given  a  sufficient  number  of 
different  forms  for  keeping  books  to  enable  the  progressive  bookkeeper  or  student  to 
originate  a  set  of  forms  for  almost  any  line  of  business  whereby  from  10  to  50  per 
cent  in  time  and  worry  may  be  saved;  and  the  value  of  these  forms  is  greatly  enhanced 
by  the  fact  of  their  being  constructed  upon  and  governed  by  the  true  principles  of 
BooJ<;keeping. 

While  the  Loose-leaf  Ledger  System  and  the  Card  System  of  keeping  books  have 
their  advantages,  they  also  have  their  disadvantages — the  danger  of  the  cards  or  the 
loose  leaves  getting  misplaced,  etc.;  but  with  the  proper  check  against  misplacing  any 
of  the  loose  leaves  or  the  cards,  either  of  these  plans  may  yield  its  followers  a 
reasonable  degree  of  satisfaction. 

INVOICE  BOOKS. 

Some  firms  paste,  in  a  regular  Invoice  Book,  all  invoices  of  goods  they  purchase  on 
time;  then  post  direct  from  the  Invoice  Book  to  the  credit  of  each  firm's  account, 
extending  the  footings  forward  on  Invoice  Book;   and  at  the  end  of  the  month  they 

73- 


debit  Merchandise  in  one  entry  for  the  total  amount  of  goods  purchased  during  the 
month. 

The  bookkeepers  of  some  large  concerns  wait  until  the  end  of  the  month  before 
crediting  the  firms  with  the  goods  they  purchased  of  them,  and  at  the  end  of  the 
month  group  the  invoices.  For  instance,  suppose  you  had  purchased  twenty  different 
bills  of  one  firm.  At  the  end  of  the  month  you  could  go  to  your  Journal  and  credit 
the  firm  with  the  total  in  one  entry,  and  in  the  "explanatory  column"  of  the  Journal 
you  could  make  some  references  in  regard  to  where  the  invoices  are  filed;  then,  if  you 
should  later  have  occasion  to  refer  to  the  original  invoices,  you  could  do  so  without 
any  trouble. 

DRAUGHON'S  PURCHASE  JOURNAL. 

One  of  the  best  labor  savers  and  the  most  complete  records  for  entering  invoices 
of  goods  you  purchase  is  Draughon's  Purchase  Journal.  A  diagram,  with  full  instruc- 
tions how  to  use  the  journal,  will  be  SENT  FREE  to  every  one  who  will  write 
EXPERT  ACCOUNTING  DEPARTMENT  OF  DRAUGHON'S  PRACTICAL  BUSINESS 
COLLEGE  COMPANY,  Nashville,  Tenn.,  U.  S.  A. 

POSTING  DIRECT  FROM  CHECK  BOOK. 

SOME  bookkeepers  in  large  businesses  carrying  bank  accounts  in  the  Ledger  do  not 
journalize  checks.  They  have  a  special  Check  Book  made  and  post  direct  from 
the  Check  Book  to  the  Ledger.  By  having  in  the  Check  Book  several  extra  columns, 
both  debits  and  credits,  posting  can  be  greatly  facilitated. 

Where  a  firm  does  business  with  more  than  one  bank,  the  bookkeeper,  in  posting 
direct  from  Check  Book,  can  give  one  special  column  to  each  bank  and  another 
special  column  to  each  account  most  largely  affected  by  checks.  For  instance,  fifty 
checks  are  drawn  during  the  month  to  pay  for  merchandise  bought  for  cash.  The 
bookkeeper  extends  the  amount  of  each  check  in  the  Bank  column,  to  be  credited  to 
the  bank  at  the  end  of  each  month  in  one  entry;  he  also  stops  the  amount  of  each 
check  in  the  Merchandise  column,  to  be  debited  at  the  end  of  the  month  to  Merchandise 
account  in  one  entry.  By  this  plan  the  bookkeeper  has  only  one  posting,  one  debit, 
and  one  credit  to  represent  fifty  entries. 

TO  BUSINESS  FIRMS. 

It  is  our  opinion  that  in  any  line  of  business  from  10  to  50  per  cent  in  time  may 
be    saved    for    the    bookkeeper    by    installing    Draughon's    up-to-date    forms,    to    say 
nothing  of  the  fact  that  by  the  use  of  these  forms  the  bookkeeper  will  be  able  to 
submit  to  the  firm  far  more  valuable  information  about  the  business  than  he  could 
by  the  old  plan  of  keeping  books.    If  bookkeepers  or  business  firms  will  write 
THE  EXPERT  ACCOUNTING  DEPARTMENT 
DRAUGHON'S  PRACTICAL  BUSINESS  COLLEGE  CO., 
NASHVILLE,  TENN., 
sending  a  leaf  of  each  book  used  and  a  copy  of  each  blank  used,  and  the  Expert 
Accounting  Department  of   Draughon's   Practical   Business   College   Company   cannot 
in  every  case  so  systematize  the  firm's  work  that  from  10  to  50  per  cent  in  time  may 
be  saved  by  its  office  force,  no  charges  will  be  made. 


74 


Abbreviations  and  Characters  in  General  Use, 


A  \.   First-class. 

Acct.,  Account. 

Admr,,  Administrator. 

Ad'iyxx.,  Administratrix. 

Adv.,  Adventure,  Advocate,  Ad- 
vent, Adverb. 

Advtg.,  Advertising. 

Agmt.,  Agreement. 

Agt.,  Agent. 

A.M.,  Master  of  Arts. 

Amer.,  American. 

Amt.,  Amount. 

Ans.,  Answer. 

Api}.,  Appendix. 

Apr.,  April. 

Art.,  Article. 

Assd.,  Assorted. 

Asst.,  Assistant. 

Aug.,  August.- 

Bal.,  Balance, 

Bbl,  Barrel. 

B.  B.,  Bill  Book  or  Bank  Book. 

Bdls.,  Bundles. 

B.  Ex.,  Bill  of  Exchange. 

Bgs.,  Bags. 

Bk.,  Bank,  book. 

Bkts.,  Baskets. 

B.  L.,  Bill  of  Lading. 

BU.,  Bales. 

Bot.,  Bought. 

B.  P.  or  Bills  Pay.,  Bills  Paya- 
ble. 

B.  R.  or  Bills  Rec,  Bills  Re- 
ceivable. 

Bus.  or  Bush.,  Bushel. 
Bx.,  Box. 

C.  or  Ct.,  Cent. 
Cash.,  Cashier. 

C.  B.,  Cash  Book.  • 
Cert.,  Certificate. 
C.  H.,  Courthouse. 
Chgd.,  Charged, 
Chmn.,  Chairman, 
Cks.,  Casks. 
Ck.,  Check. 
Clk.,  Clerk. 
Co.,  Company. 

C.  O.  D.,  Collect  on  Delivery 
Com.,  Commission. 

Con.  or  Const.,  Consignment. 
Cr.,  Creditor. 
Gwt.,  Hundredweight. 
DD.,  Days  after  Date. 

D.  B.,  Day  Book. 
Dec,  December. 

Dep.,  Deposit  or  Deposited. 

Dep.  B.,  Deposit  Book. 

Dft.,  Draft. 

Dis.,  Discount. 

Div.,  Dividend. 

Do.,  The   Same. 

Dots.,  Dollars. 

Doz.,  Dozen. 

Br.,  Debtor. 

Dray.,  Dray  age. 

Ds.,  Days. 

Ea.,  Each. 


E.   E.,  Errors  Excepted. 

E.  and  O.  E.,  Errors  and  Omis- 
sions Excepted. 

Entd.,  Entered. 

Etc.  or  dc.  And  others ;  and 
so  forth. 

Ex.,  Example. 

Exch.,  Exchange. 

Exp.,  Expense  or  Export. 

Fav.,  Favor, 

F.B.E.,  Foreign  Bills  of  Ex- 
change. 

Feb.,  February. 

F.  or  Fol.,  Folio. 

F.  O.  B.,  Free  on  Board, 
Ford.,  Forward. 
Frt.,  Freight. 
Ft.,  Foot  or  Feet. 
Gro.,  Gross. 
Gt.  Gro.,  Great  Gross. 
Gal,  Gallon. 
Guar.,  Guarantee. 
ridkf..  Handkerchief, 
Hhd.,  Hogshead. 
Hund.,  Hundred. 
/.  B.,  Invoice  Book. 
7.  E.   (Id  est),  That  is. 
■  In  Tran.,  On  the  Way. 
Ins.,  Insurance. 
Inst.,      Instant      (the      present 

month). 
Int.,  Interest. 
Inv.,  Invoice. 
Invt.,  Inventory. 
Jan.,  January. 
J.  or  Jour.,  Journal, 
J.  P.,  Journal  Page.  \ 

Kg.,  Keg, 
Lat.,  Latitude. 
Led.,  Ledger. 
L.  B.,  Letter  Book, 
Lbs.,  Pounds. 
L.  S.,  Left  Side. 
L.  P.  or  L.  F.,  Ledger  Page. 
M.,  One  thousand. 
M.  or  Mo.,  Month. 
Mar.,  March. 
Mdse.,  Merchandise. 
Messrs.,   Gentlemen. 
Mem.  or  Memo.,  Memorandum. 
Mfg.,  Manufacturing. 
Mme.,  Madame. 
Mols.,  Molasses. 
MS.,  Manuscript. 
MS8.,  Manuscripts. 
Nat.,  National. 

N.  B.    {Nota  Bene),  Take  No- 
tice. 
No.,   Number. 
Nov.,  November. 
Oct.,  October. 
O.     I.     B.,     Outward     invoice 

Book. 
Oz.,  Ounce. 
P.,-  Page.     Pp.,  Pages. 
Payt.,  Payment. 
P.  C.  B.,  Petty  Cash  Book. 

75 


Pd.,  P^id= 

Per  or  Pr.,  By  the. 

Per  An.  (Per  Annum),  By  the 
Year. 

Per  cent  (Per  centum),  By  the 
hundred. 

Pkg.,  Package. 

P.  M.,  Postmaster. 

P.  O.  D.,  Pay  on  Delivery. 

P.  O.,  Post  Office. 

P.  O.  O.,  Post  Office  Order. 

P.  and  L.,  Profit  and  Loss. 

Pol.,  Policy. 

Pr.,  Pair. 

Prem.,   Premium. 

Prox.  (Proximo),  The  Next 
Month. 

Pc,  Piece,    Pes.,  Pieces. 

Pres.,    President, 

Prin.,  Principal. 

Pk.,  Peck. 

Pub.,  Public  or  Publisher. 

Qr.,  Quarter. 

Retd.,  Returned. 

Reed.,  Received. 

R.  R.,  Railroad. 

S.  B.,  Sales  Book. 

Sec,  Secretary. 

Sept.,  September. 

Shipt.,  Shipment. 

St.  Dft.,  Sight  Draft. 

Stg.,  Sterling. 

Sunds.,  Sundries. 

Supt.,   Superintendent. 

Trans.,  Transaction. 

T.  D.,  Telegraph  Dispatch. 

Treas.,  Treasurer. 

XJlt.  (Ultimo),  The  Last  Month. 

U.  S.  A.,  United  States  Ameri- 
ca. 

U.  S.  M.,  United  States  Mail. 

Vol.,  Volume. 

Viz.  (Videlicet),  To  wit,  Name- 
ly. 

Vs.   (Versus),  Against. 

V.  P.,  Vice  President. 

r.  or  Yr.,  Year. 

Yds.,  Yards. 

+  (Plus),  Addition. 

—  (Minus),   Subtraction. 

—  (Equal),  Equality. 

X    (By),  Multiplication. 
■—   (Divided  by),  Division. 

:   (Is  to).  Proportion. 

:  :    (As),   3:12::5:20. 
$,  Dollar' or  dollars. 

c.  Cent  or  cents. 

£,  Pounds  Sterling. 

d.  Pence. 
P,  Per. 

@,  At  or  to, 

(fo,  Per  Cent, 

y/.  Check  Marko 

l^  One  and  one-fourth. 

1'.   One  and  two-fourths. 

1^,  One  and  three-fourths. 

rb,   ^ound. 


DRAUGHON'S 

PROGRESSIVE  BOOKKEEPING 
LEGAL  ADVISER. 


AND 


252   PACES.     PRICE,  POSTPAID,  $2.50. 


The 


Most  Complete 
Most  Practical 
Most  Original 
Most  Progressive 


BEST  ADAPTED  BOOK  EVER  ISSUED. 

The  advanced  bookkeeper,  as  well  as  the  bookkeeper  of  limited  ex- 
perience, will  find  in  DRAUGHON'S  PROGRESSIVE  BOOKKEEPING 
AND  LEGAL  ADVISER  valuable  information. 


Return  It.  Any  first-class  bookkeeper 
may  order  "Draughon's  Progressive  Book- 
keeping and  Legal  Adviser"  on  the  condi- 
tion that  if  he  does  not  consider  it  of  great 
value  to  him,  or  if  he  does  not  consider  it 
the  MOST  COMPLETE,  PRACTICAL, 
PROGRESSIVE,  and  BEST  SUITED 
work  for  both  the  BEGINNER  and  the 
EXPERT  bookkeeper  that  ever  came  un- 
der his  observation,  he  may  return  it  to 
Draughon's  Practical  Business  College 
Company,  Nashville,  Tenn.,  within  twen- 
ty-four hours  after  he  receives  it,  and  his 
money  will  be  refunded.  It  should  be 
the  ambition  of  every  bookkeeper  to  reach 
the  top  of  his  profession.  To  such  as 
have  this  ambition  this  book  will  prove 
absolutely  indispensable. 

Cannot  Do  It  Justice.  In  the  small 
space  available  it  is  impossible  to  present 
the  many  advantages  of  "Draughon's  Pro- 
gressive Bookkeeping  and  Legal  Adviser." 
However,  we  hope  to  present  sufficient  of 
its  advantages  to  cause  the  reader  to  or- 


der a  copy  subject  to  approval,  as  ex- 
plained above. 

For  the  Beg-inner.  We  guarantee  that 
even  an  inexperienced  person  of  average 
aptitude  can,  by  the  study  of  "Draughon's 
Progressive  Bookkeeping  and  Legal  Ad- 
viser," become  competent  to  keep  a  set  of 
Double-Entry  Books,  or  to  open,  close,  or 
change  books  from  Single  Entry  to  Double 
Entry;  change  partnership  books  to  stock 
company  books,  etc.  As  a  matter  of  fact, 
after  working  according  to  instructions 
all  the  sets  found  in  the  book,  one  will 
know  more  Bookkeeping,  and  will  be 
more  competent  to  keep  books,  than  if  he 
had  taken  a  full  course  in  one  of  fifty 
per  cent  of  so-called  "business  colleges." 

A  Few  Accounts.  "Draughon's  Pro- 
gressive Bookkeeping  and  Legal  Adviser" 
tells  how  to  OPEN,  DEBIT,  CREDIT,  and 
CLOSE  almost  every  account  imaginable, 
giving  all  the  details  of  the  different  en- 
tries and  exhaustively  explaining  each 
of  them,  and,  in  addition  to  the  accounts 


76 


And  the  mass  of  Information  given  in 
"Draughon's  Practical  Bookkeeping  Il- 
lustrated," contains  full  explanation  of 
the  following  accounts — how  opened,  how 
closed,  etc. 

FOR  CORPORATIONS. 
Capital  Stock 

(Three  plans  for  opening). 

Treasury  Stock. 

Subscription  Stock. 

Preferred  Stock. 

Surplus  Fund. 

Sinking  Fund. 

Dividend  Account. 

Watered  Stock 

(How  stock  is  watered;  how  watered  stock 
is  detected,  and  why  every  person  should  be 
able  to  detect  it  in  order  to  protect  his  in- 
terests). 

•Cash  Over  or  Short. 

Petty  or  Sundry  Accounts. 

Branch  House. 

(Two  plans.) 

Accounts  with  Collecting  Agencies. 

Doubtful  and  Worthless  Accounts. 

C.  O.  D.  Accounts. 

LUMBER  BUSINESS 

(Peculiar  to  Itself). 

Mill  Check  Accounts. 

Signature. 

Discount  Check. 

Pay  Roll. 

Lumber. 

Commissary  Merchandise. 

Sawmill  Machinery. 

Sawmill  Expense. 

Planing  Mill  Machinery. 

Planing  Mill  Expense. 

Railroad  Machinery,  Tracks,  etc. 

Railroad  Expense. 

Timber  and  Logs. 

ITS  ADVANTAGES  CONTINUED. 

"Draughon's  Progressive  Bookkeeping 
and  Legal  Adviser"  tells: 

How  to  learn  to  read  figures  as  rapidly 
and  accurately  as  regular  reading  matter. 

How  to  carry  amounts  in  addition  in 
long  columns  without  being  subject  to 
confusion  in  case  of  being  interrupted. 

How  the  key  figure  will  prove  posting, 
addition,  subtraction,  multiplication,  or 
any  other  computation  in  half  the  time  it 


can  be  done  by  the  old.  plan,  and  with 
more  accuracy. 

How  to  take  a  Trial  Balance  without 
even  adding  the  Ledger  accounts. 

Why  accuracy  is  one  of  the  most  im- 
portant points  in  Bookkeeping. 

Why  many  persons  lose  their  positions 
by  not  being  accurate. 

How  to  become  accurate  at  figures. 
Why  it  is  a  very  serious  thing  for  a 
bookkeeper  not  to  make  a  record  of  Cash 
Over  or  Short.  (Many  an  honest  book- 
keeper's integrity  has  been  questioned  by 
reason  of  his  failure  to  make  a  record  of 
cash  over  or  short,  being  innocent  of  any 
criminal  intention.) 

A  rule  which,  if  followed,  will  prevent 
any  person's  allowing  Cash  to  get  out  of 
balance. 

Copartnership. — Several  sets  of  Co- 
partnership Business  given,  and  a  variety 
of  entries;  books  posted  and  closed;  state- 
ments made;  and  the  proper  explanation, 
in  the  proper  place,  given  of  each  entry. 

Corporations. — One  set  known  as  "Rock 
City  Grocery  Company  Set."  Stock  sub- 
scribed for,  payments  made,  books  opened, 
business  continued  for  eight  months,  and 
books  closed  twice  during  the  time.  This 
set  alone  contains  more  ACTUAL  BOOK- 
KEEPING, more  PRACTICAL  ENTRIES, 
and  MORE  and  BETTER  EXPLANA- 
TIONS than  are  given  in  HALF  A  DOZEN 
SETS  found  in  most  text-books.  Almost 
every  entry  is  handled  in  this  set,  and  in 
a  practical  way.  A  person's  becoming  per- 
fectly familiar  with  this  set  will  enable 
him  to  open  and  handle  almost  any  ac- 
c6unt  without  any  trouble. 

Lumber  Business. — The  book  contains 
one  set  in  the  lumber  business — capital 
stock,  $400,000.  These  entries  were 
taken  directly  from  actual  business. 
Nearly  all  accounts  in  the  lumber  busi- 
ness are  represented  in  this  set.  Every 
department  of  the  business  is  kept  with 
system,  and,  by  adopting  the  system' 
which  we  have  instituted,  one  can  keep 
a  record  of  the  expenses  and  profits  of 
each  department  of  the  lumber  business. 

The  book  net  only  gives  full  explana- 
tions en  how  to  declare  profits,  open  and 
close  books,  etc.,  but,  in  addition,  contains 
diagrams  which   will   enable  any  person 


77 


to  acquire  a  full  knowledge  of  OPENING 
and  CLOSING  BOOKS— something  that 
50  per  cent  of  the  so-called  "bookkeepers" 
cannot  correctly  do. 

One  set  of  books  changed  from  Copart- 
nership to  Joint  Stock  Company,  by  two 
different  plans,  with  full  explanations. 

Many  different  plans  for  closing  books 
and  declaring  profits;  diagrams,  with  full 
explanations. 

Rules  for  opening  books  for  Joint  Stock 
Companies.  Different  books,  etc.,  used 
fully  explained. 

The  difference  between  a  Joint  Stock 
Company,  a  Copartnership,  and  a  Corpo- 
ration. 

Full  explanation  of  a  Limited  Liabili- 
ty Company. 

Why  opening  a  Cash  account  in  the 
Ledger  necessitates  extra  work. 

Why  a  bookkeeper  should  be  extremely 
careful  in  inserting  dates  in  books  of 
original  entry  as  well  as  in  the  Ledger. 

The  difference  between  a  Sight  Draft 
and  a  Time  Draft. 

Best  plan  to  enter  note  renewed;  how 
to  save  time  in  posting. 

Why  journalizing  sales  necessitates  ex- 
tra work. 

How  to  prove  your  Cash  and  balance 
your  Cash  Book,  and  why  you  should 
prove  Cash  dkily. 

Explanations  in  full  as  to  which  side 
of  the  Ledger  certain  columns  of  the  Cash 
Book,  Journal,  and  Sales  Book  should  be 
posted. 

How  to  enter  checks  as  cash  items,  or 
to  carry  such  entries  through  Journal. 

Certified  checks — ^why  they  are  issued, 
etc. 

How  you  should  do  business  with  a 
bank,  and  your  obligations  to  a  bank. 

How  to  open  an  account  and  to  keep 
track  of  the  losses  or  gains  in  any  de- 
partment. 

Some  of  the  peculiar  methods  of  enter- 
ing an  invoice  correctly. 

The  first  thing  to  be  done  when  you  re- 
ceive cash. 

How  to  transfer  accounts  from  old 
Ledger  to  new  Ledger. 

How  to  classify  accounts. 

Why  it  is  advisable  to  itemize  certain 
accounts  in  the  Ledger. 


Practical  advice  to  bookkeepers. 

The  fundamental  principles  of  Double- 
Entry  Bookkeeping. 

Diagrams  of  Cash  Book,  Journal,  Sales 
Book,  and  Ledger,  with  explanation  of 
each. 

Diagrams  of  different  forms  of  Cash 
Book. 

The  best  plan  for  keeping  books  for  a 
retail  business,  and  how  the  work  can  be 
lessened  50  per  cent. 

Days  of  grace  explained. 

When  to  use  red  ink. 

How  and  why  you  take  a  Trial  Balance. 

Certain  errors  that  a  Trial  Balance  will 
not  detect,  and  how  to  detect  such  errors. 

The  first  thing  you  should  do  when 
you  take  charge  of  a  new  set  of  books. 

Why,  when  one  asks  you  how  to  make 
a  complicated  entry,  you  should  require 
him  to  put  his  question  in  writing. 

How  to  pay  dividends,  decrease  or  in- 
crease capital  stock,  etc. 

How  to  put  books  on  balance  if  error 
cannot  be  found. 

The  best  way  to  make  a  change  in  In- 
dex Book  when  you  transfer  accounts 
from  one  page  to  another. 

How  to  save  time  in  posting,  when 
keeping  a  bank  account  in  the  Ledger. 

How  to  draw  up,  transfer,  and  indorse 
different  kinds  of  commercial  paper. 

Why  you  should  require  every  person 
of  whom  you  receive  commercial  pa- 
per to  indorse  it,  even  though  it  be  drawn 
payable  to  "bearer,"  or  to  "cash,"  or  in- 
dorsed "in  blank;"  and  why  you  should 
erase  your  indorsement  in  case  the  paper 
is  returned  to  you. 

How  and  why  many  progressive  book- 
keepers make  cross  entries  through  the 
Cash  Book,  though  they  are  not  all  cash 
transactions. 

How  to  dispense  with  the  Journal,  and 
why  time  can  be  saved  by  using 
"Draughon's  Purchase  Journal." 

Why  you  should  always  take  a  Trial 
Balance  just  before  you  declare  profits. 

Several  different  plans  for  entering: 
Cash  received,  less  a  discount;  Cash  paid 
out,  less  a  discount;  Notes  paid,  less  a 
discount;  Notes  paid,  with  interest,  etc. 

Why  it  is  necessary  in  certain  lines  of 


78 


business    to    make    entries    by    different 
plans,  to  use  different  boolts,  etc. 
A  Jobber,  and  how  he  conducts  his  busi- 


A  Commission  Merchant — his  plan  of 
doing  business,  and  the  different  books 
used  in  the  commission  business. 

How  to  mark  cost  and  selling  prices  of 
goods. 

How  a  Cash  account  can  be  kept  in 
Ledger  or  Cash  Book, 

How  to  close  different  accounts  into 
Profit  and  Loss — Skeleton  Ledger,  with 
diagram,  giving  full  direction  and  expla- 
nation; a  complete  bird's-eye  view  of  the 
closing  entries. 

Why  an  account  should  be  indexed  be- 
fore the  name  of  the  person  or  firm  is 
written  in  the  Ledger, 

Single-Entry  Bookkeeping,  and  why  it 
should  not  be  practiced. 

How  to  keep  books  for  a  farm. 

How  to  admit  a  partner. 

What  a  Petty  or  Sundry  account  is. 

Paging  in  red  ink  facilitated. 

General  rule  for  making  entries. 

Rules  for  detecting  errors  in  Trial  Bal- 
ance. 

Why  it  is  necessary  in  certain  lines  of 
business  to  have  two  or  more  Freight  ac- 
counts or  two  or  more  Merchandise  ac- 
counts, and  how  to  keep  such  accounts 
separately  and  correctly. 

Why  it  is  not  necessary  to  keep  a  Bank 
account  in  the  Ledger. 

How  to  refer  directly  from  Ledger  to 
Sales  Book,  even  though  the  entry  has 
been  carried  through  the  Journal. 

Why  some  bookkeepers  have  different 
plans  of  making  entries,  and  why  it  is 
necessary  in  certain  lines  of  business  to 
use.  different  books. 

How  wholesale  houses  can  use  more 
than  one  Sales  Book. 

What  a  Petty  Cash  Book  is. 

How  to  waive  protest. 

Why  it  is  dangerous  to  give  checks  to 
strangers. 

How  checks  can  be  raised,  and  how  you 
can  draw  a  check  so  as  to  make  it  almost 
Impossible  for  a  person  to  raise  the 
amount. 

How  Sxchange  is  issued  by  banks,  and 


several  different  plans  for  making  remit- 
tances. 

Why  you  should  count  money  in  the 
presence  of  the  person  of  whom  you  re- 
ceive it. 

How  to  learn  to  count  money  rapidly 
and  accurately. 

Why  one  should  be  very  careful  in  buy- 
ing past-due  paper,  and  why  it  is  subject 
to  set-off,  etc. 

How  one  can  be  forced  to  pay  a  note 
the  second  time,  though  he  has  a  receipt 
showing  that  he  has  previously  paid  a 
part  or  the  whole  of  it. 

Special  rules  that  should  be  observed 
in  drawing  up  commercial  paper,  buying 
real  estate,  recording  the  purchase  of  the 
same,  etc. 

United  States  Postal  Laws,  telling 
what  comprises  first,  second,  third,  and 
fourth  class  mail  matter;  how  money  or- 
ders, postal  notes,  etc.,  are  issued;  and 
why  a  person  may  be  subject  to  a  fine  by 
writing  messages  in  other  than  first-class 
mail  matter. 

Why  it  is  dangerous  to  leave  your  sig- 
nature on  blafuk  paper. 

Partial  Payments,  averaging  accounts, 
the  shortest  and  simplest  methods  for 
calculating  interest,  discount,  etc. 

Three  Kinds  of  Discount. — True  Dis- 
count, Bank  Discount,  Commercial  Dis- 
count— with  full  explanation  of  each. 

Interest  rates  of  different  States. 

Why  employees  of  a  firm  should  never 
speak  of  the  private  affairs  of  the  firm's 
business,  and  why  they  are  liable  to  lose 
their  positions  by  doing  so. 

The  importance  of  writing  a  good  busi- 
ness hand,  and  how  a  person  can  become 
a  good  penman  at  home  or  in  school. 

Position. — How  to  apply,  in  writing, 
for  a  position,  so  as  to  favorably  impress 
the  firm,  and  how  to  write  other  business 
letters. 

How  you  should  consider  the  amount 
of  salary  when  applying  for  a  position. 

How  a  progressive  bookkeeper  can  pre- 
pare books  especially  adapted  to  any  line 
of  business  whereby  work  can  be  lessened 
from  10  to  50  per  cent. 

How  to  enter  checks  as  cash  items  or 
carry  them  through  the  Journal. 

How  to  teach  Bookkeeping  successfully. 


79 


giving  Draughon's  practical  method  of 
teaching  Bookkeeping.  This  method  will 
cause  each  student's  work  to  be  different, 
thus  preventing  students  from  comparing 
work. 

Commercial  abbreviations  and  charac- 
ters in  general  use. 

Special  Forms. — In  addition  to  the  old 
forms  of  books,  it  gives  special  improved 
forms  of  the  following  books:  Six-column 
Trial  Balance  (which  enables  a  person  to 
take  a  Trial  Balance  every  month  for  six 
months  without  having  to  write  the  name 
more  than  once),  Six-column  Cash  Book 
for  printing  office,  Six-column  Cash  Book 
for  mercantile  business.  Nine-column 
Combined  Cash  Book-Journal  for  mer- 
cantile business,  Subscription  Book  for 
corporations  and  banks.  Lumber  Sales 
Book,  "Draughon's  Purchase  Journal," 
"Draughon's  Sales  Register,"  Discount 
and  Collection  Register,  Cash  Book  for 
Banking. 

Other  Forms. — Lumber  Invoice,  Pay 
Roll,  Consignment  Book,  Installment 
Scrip,  Preferred  Stock  Certificate,  Bank 
Stock  Certificate,  Six  Per  Cent  First  Mort- 
gage Bond,  Individual  Note,  Joint  Note, 
A  Joint  and  Separate  Note,  Interest-bear- 
ing Note,  Sealed  Note,  Note  with  Waiver 
of  Homestead  and  Exemption,  A  Non-ne- 
gotiable Note,  Bill  of  Exchange,  A  Time 
Draft,  A  Sight  Draft,  Checks,  Various 
Forms  of  Duebills;  Various  Forms  of  In- 
dorsement, as  follows:  In  Blank,  In  Full, 
Restrictive,  Qualified,  with  Protest 
Waived,  etc. 

Broker's  Technicalities. — "A  Bull,"  "A 
Bear,"  "A  Corner,"  "Long,"  "Short,"  "A 
Pool  or  Ring,"  "A  Put,"  "A  Call,"  "A 
Wash."    Full  explanation  of  each. 

Banking". — Introductory  to  the  Bank- 
ing Course,  discussing  how  to  establish  a 
bank;  the  different  kinds  of  banks — Na- 
tional, State,  and  Private  banks.  In  ad- 
dition to  this  general  information,  we 
have  organized  a  National  Bank  (the 
most  complicated),  and  continued  it  for 
several  months,  giving  the  different  en- 
tries that  generally  come  up  in  the  Bank- 
ing business,  forms  of  the  different  books, 
etc 


Legal  Adviser  Department. — This  de- 
partment of  the  book  alone  is  WORTH 
TEN  TIMES  the  price  of  the  book.  Many 
pages  are  devoted  to  the  cream  of  Com- 
mercial Law,  touching  on  points  es- 
sential to  business  men  and  the  public 
generally  —  namely:  Constitutional  Law, 
Statute  Law,  Common  Law,  Commercial 
Law;  Contracts — Parties,  Assents,  Consid- 
eration, Subject-matter;  Defenses— Stat- 
ute of  Limitation,  Payment,  Performance 
or  Offer  to  Perform,  Forfeiture,  Set-off,  Re- 
coupment, Failure  of  Consideration,  Ten- 
der, Statute  of  Frauds;  Notes  and  Bills, 
Checks  and  Drafts,  Bills  of  Lading,  Ware- 
house Receipts,  Partnership,  Corporations, 
etc. 

PRACTICAL  BOOKKEEPING. 

The  foregoing  are  the  principal  features 
of  "Draughon's  Progressive  Bookkeeping 
and  Legal  Adviser,"  a  work  of  which 
Jno.  F.  Draughon,  practical  accountant 
and  President  of  Draughon's  Practical 
Business  College  Company,  is  the  author. 
While  it  is  an  up-to-date  book,  one  of  the 
special  features  of  it  is  the  simplicity 
with  which  the  subject-matter  is  pre- 
sented. The  author  spared  no  pains  to 
present  the  subject-matter  in  a  conversa- 
tional way,  and  in  such  an  elementary 
way  as  to  make  intricate  subjects  plain  to 
the  commonest  apprehension.  We  believe 
that  no  other  book  published  contains  so 
much  valuable  and  practical  information 
as  is  contained  in  this  one.  There  is  NO 
SUBJECT  respecting  Bookkeeping — and, 
we  might  say,  NO  LINE  of  business — 
that  is  not  covered  in  this  book: 

"DRAUGHON'S  PROGRESSIVE  BOOK- 
KEEPING AND  LEGAL  ADVISER." 
PRICE,  POSTPAID,  $2.50. 

Special  rates  to  teachers.  Remit  by 
registered  letter,  money  order,  express,  or 
New  York  Exchange.  If  by  private  check, 
add  15  cents  for  exchange.    Address 

EXPERT  ACCOUNTING  DEPARTMENT 
DRAUGHON'S 
PRACTICAL  BUSINESS  COLLEGE  CO., 
NASHVILLE,  TENN.,  U.  S.  A.   ' 


80 


DRAUGHON'S  o^ZiSiSS.^ 

DOUBLE 
ENTRY  MADE  EASY 

By  JNO.  F.  DRAUGHON 

SENT  ON  60  DAYS'  TRIAL 

TO  PRACTICAL  BOOKKEEPERS  ONLY. 


A  FEW  OF  ITS  MANY  ADVANTAGES. 


1.  Time  and  labor  saved — many  book- 
keepers say  50  per  cent. 

2.  General  Trial  Balance  can  be  taken 
in  ten  minutes,  with  10,000  or  more  open 
accounts  in  your  books. 

3.  Errors  located  without  using  key  fig- 
ures, or  slips,  or  doing  any  checking  or 
other  additional  work  while  posting.  It 
is  a  system  of  Bookkeeping. 

4.  If  an  error  is  made,  you  can  tell  in 
which  section  of  your  books  it  is  to  be 
found  without  using  the  key  figure,  or 
slips,  or  doing  any  extra  work. 

5.  Statement  of  the  Business  can  be 
given  in  five  minutes,  with  10,000  open 
accounts  in  your  books,  showing  the 
amount  due  the  business  on  open  accounts 
and  the  amount  the  business  is  due  oth- 
ers on  open  accounts;  in  fact,  it  is  the 
only  system  of  Bookkeeping  known  that 
will  at  all  times  show  a  correct  State- 
ment of  the  Business. 

6.  You  can  take  a  Trial  Balance,  even, 
without  adding  the  accounts  in  the 
Ledger;  still,  this  is  not  our  short  Trial 
Balance  system  mentioned  above. 

7.  Check  on  Posting  to  the  Wrong 
Ledger  Account. — In  this  case  you  can 
step  into  your  brother  bookkeeper's  office 
and,  without  looking  into  his  Ledger,  tell 
whether  he  has  posted  to  the  wrong  ac- 
count. (We  do  not  expect  you  to  risk 
your  life  on  this  statement  until  you  see 
it  demonstrated.) 

8.  Under  this  system  you  can  take  any 
bookkeeper  into  your  oflBce  (he  having  no 


knowledge  of  this  system),  let  him  post 
on  your  books  for  two  weeks  or  longer, 
and  he  will  likely  never  discover  any  dif- 
ference between  this  system  and  the  old 
style;  still,  you  could,  after  he  got  through 
posting,  take  your  general  Trial  Balance 
in  a  few  minutes,  with  10,000  accounts  in 
your  books,  and  if  he  had  made  any  error 
in  his  work,  you  could  locate  it  at  once, 
without  going  over  his  work. 

9.  This  system  can  be  learned  in  from 
three  to  five  hours  by  one  who  has  already 
a  fair  knowledge  of  Bookkeeping. 

10.  Adaptable  to  any  set  of  commercial 
books.  Not  necessary  to  buy  new  books. 
Change  to  this  system  can  be  made  from 
any  set  of  books  in  ten  minutes. 

11.  When  once  used,  the  firm,  for  ob- 
vious reasons,  will  never  again  allow  its 
books  to  be  kept  under  the  old  system. 

Thousands  of  bookkeepers  uSing  it  will 
verify  the  foregoing  statements. 

We  will  present  you  with  a  check  for 
$25  if  the  above  contains  any  misrepre- 
sentations. 

Each  subscriber  receives  instructions  ou 
any  point  of  Bookkeeping  at  the  present 
time  and  "for  years  to  come,"  FREE.  We 
have  turned  on  the  light  for  many  book- 
keepers. All  correspondence  is  confiden- 
tial. 

HOW  TAUGHT:  How  Draughon's  New 
System  of  Bookkeeping  is  Taught  by 
Mail. — The  number  of  books  used  makes 
no  material  difference.    We  send  out  Cash 


81 


Book,  Journal,  Sales  Book,  Ledger,  and 
Book  of  Instruction,  with  three  months' 
business  already  arranged  and  posted, 
giving  three  separate  Trial  Balances,  with 
full  instructions. 

INSTRUCTIONS.— The  Book  of  Instruc- 
tions contains  thirty-two  large  pages,  nine 
by  twelve  inches.  It  is  a  book  devoted  to 
what  we  might  call  "an  entirely  new  sys- 
tem of  Double-Entry  Bookkeeping." 

Besides  regular  instruction  on  Draughon's 
New  System,  it  gives  many  different 
forms  for  keeping  books.  You  may  read 
many  advertisements  by  persons  claiming 
to  be  authors  of  new  systems  of  Bookkeep- 
ing, but  when  you  order  the  article  which 
they  have  for  sale  you  are  surprised  to 
find  that  you  have  purchased  only,  a  sys- 
tem of  PROOF  SHEETS,  or  something  of 
that  kind,  and  not  a  system  of  Bookkeep- 
ing. 

We  claim  for  "Double  Entry  Made 
Easy"  that  it  is  an  entirely  new  system 
of  Bookkeeping.  But  we  give  in  the  Book 
of  Instructions  full  information  as  to  how 
to  prove  addition,  subtraction,  multipli- 
cation, and  division,  as  well  as  how  to 
prove  posting,  etc.,  by  the  use  of  the  key 
figures,  or  slips,  for  which  many  persons 
charge  from  $5  to  $10. 

This  system  is  the  only  system  of  Book- 
keeping that  has  ever  come  under  the  ob- 
servation of  the  author  that  will  at  all 
times  show  a  correct  Statement  of  the 
Business  without  additional  work.  It  is 
prepared  especially  for  advanced  students 
and  practical  bookkeepers.  Bookkeepers 
who  claim  the  title  "expert"  may  learn 
from  it  something  of  incalculable  value 
to  them. 

Remember,  we  send  the  outfit  on  60 
days'  trial,  paying  the  express  charges 
each  way.  You  are  not  out  one  cent. 
Does  this  not  indicate  that  we  have  faith 
in  the  merits  of  the  system?  Isn't  this  a 
fair  proposition?    Could  you  expect  more? 

Now,  bear  in  mind  that  the  proposition 
to  send  the  outfit  on  sixty  days'  trial  does 
not  apply  to  persons  who  know  nothing 
about  Bookkeeping.     We  propose  to  send 


it  on  trial  to  practical  bookkeepers  and 
to  business  men,  or  to  those  who  have  al- 
ready studied  Bookkeeping.  To  send  the 
system  on  trial  to  some  one  who  knows 
nothing  about  Bookkeeping  would  be  to 
send  it  to  an  incompetent  judge. 

TESTIMONIALS.— We  have  unsolicited 
testimonials  from  thousands  of  bookkeep- 
ers, representing  every  State  in  the  Un- 
ion and  nearly  all  the  foreign  countries; 
they  commend  Jno.  P.  Draughon's  "Double 
Entry  Made  Easy"  in  the  highest  terms. 
Many  of  these  testimonials,  which  we 
have  culled  from  complimentary  letters 
received  in  due  course  of  correspondence 
and  without  any  solicitation,  state  that 
the  writers  would  not  be  deprived  of  the 
system  for  hundreds  of  dollars.  But  why 
should  we  burden  you  with  these  testimo- 
nials, when  we  propose  to  send  the  sys- 
tem to  you  on  trial?  We  do  not  require 
you  to  keep  the  system,  even  if  found  just 
as  we  recommend  it  to  be.  You  may  de- 
cide that  the  system  is  just  as  we  recom- 
mend it,  but  for  some  special  reason  you 
do  not  wish  to  keep  it.  If  such  be  the 
case,  you  may  return  it.  You  may  hear 
the  evidence,  argue  your  own  case,  and  be 
your  own  judge  in  this  matter.  What 
more  could  we  offer  to  convince  you  that 
we  have  faith  in  the  merits  of  the  work? 
The  system  has  been  used  by  thousands 
of  bookkeepers  for  the  past  sixteen  years, 
and  from  time  to  time  we  have,  in  this 
progressive  age,  made  improvements  on 
it.  It  is  "the  true  and  the  tried."  Though 
severely  tested,  it  has  not  been  "found 
wanting."  All  that  we  ask  is  that  you 
give  it  a  fair  trial. 

Send  for  FREE  pamphlet  on  "Double 
Entry  Made  Easy,"  giving  its  other  advan- 
tages, letters  from  bookkeepers  using  it, 
terms,  etc.  Orders  received  daily  from 
all  parts  of  the  United  States  and  foreign 
countries.    Address 

EXPERT  ACCOUNTING  DEPARTMENT 

DRAUGHON'S 

PRACTICAL  BUSINESS  COLLEGE  CO., 
NASHVILLE,  TENN.,  U.  S.  A. 


82 


List  of  Books 

DRAUGHON'S   PRACTICAL   BUSINESS  COLLEGE  CO., 

Nashville,  Tenn.,  U.  S.  A. 


Draughon's  New  System  of  Bookkeeping,  "DOTJBLiE  ENTRY 
MADE  EASY."    By  Jno.  F.  Draughon. 

A  short  Trial-Balance  system,  and  the  only  system  of  Bookkeeping  known 
that  will  at  all  times  show  a  correct  statement  of  the  business.  (See 
page  8 1.) 

DRAUGHON'S  PROGRESSIVE  BOOKKEEPING  and  LEGAL 
ADVISER,    By  John  F.  Draughon. 

One  of  the  most  complete  books  on  general  Bookkeeping  ever  issued. 
(See  page  76.) 

DRAUGHON'S  PRACTICAL  BOOKKEEPING  ILLUSTRATED. 
By  Jno.  F.  Draughon. 

You  now  vSee  a  copy ;  it  speaks  for  itself. 

DRAUGHON'S  PRIMARY  BOOKKEEPING,  By  Jno,  F. 
Draughon. 

A  book  of  fifty-two  pages.  It  is  not  claimed  by  the  author  that  this  is  a 
regular  text-book  on  Bookkeeping.  It  is  a  supplement  to  our  other  text- 
books, and  goes  with  the  beginner's  outfits  to  those  who  are  taking  Book- 
keeping by  mail.  It  is  a  link  between  text-books  and  personal  instruction. 
Nothing  like  it  has  ever  before  been  published.  In  this  book  we  have  out- 
lined our  entire  Home-Study  Course  of  Bookkeeping.  It  is  the  key  to  suc- 
cess when  studying  Bookkeeping  at  home  by  correspondence. 

DRAUGHON'S  MANUAL  on  RAPID  BUSINESS  WRITING. 
By  the  Principals  of  Penmanship  Departments  of  Draughon's 
Practical  Business  College  Company. 

From  this  book  one  can  learn  to  write  a  good,  rapid  business  hand  v/ith- 
out  the  aid  of  a  teacher.     (For  home  study  and  use  in  colleges.) 

THE  GRAHAM  SYSTEM  of  SHORTHAND  SIMPLIFIED.  By 
J.  W.  Sanders. 

The  author  of  this  text-book  was  for  twenty  years  a  United  States  Court 
Reporter.  The  book  has  been  revised  by  the  principals  of  the  Shorthand 
Departments  of  Draughon's  chain  of  thirty  Colleges. 

83 


DRAtJGHON'S    PRINTED     MEMORANDUM     ENTRIES.      ] 
Jno.  F.  Draughon. 

Contains  Memorandum  Entries  of  the  Course  of  Bookkeeping  taught 
Draughon's  Practical  Business  Colleges.  We  have  never  seen  a  simi 
book,  nor  have  we  ever  heard  of  one's  being  published. 

DRAUGHON'S  PURCHASE  JOURNAL.    By  Jno.  F.  Draught 

A  book  prepared  for  actual  business.     Sold  to  merchants  to  be  used  . 
registering    invoices    of   goods    purchased  instead   of  entering  them 
Journal  or  Invoice  Book.     Send  for  diagram. 

ENGLISH  GRAMMAR  MADE  EASY.    By  Ben  H.  Caldwell. 

A  practical  grammar  for  business  people.  It  teaches  one  not  only  to 
"know  how,"  but  to  USE  good  English.  This  is  a  necessity  in  this  age, 
as  a  man  is  known  now  by  the  language  he  speaks  as  well  as  by  the  com- 
pany he  keeps. 

DRAUGHON'S  PRACTICAL  SPELLER.    By  H.  Herbert  Coone. 

A  combined  dictionary-speller,  containing  five  thousand  words  in  every- 
day business  use,  with  condensed  practical  definitions.  Poor  spelling  is  i:  t- 
excusable ;  therefore,  it  is  not  tolerated  in  business  to-day. 

BLANK  BOOKS,  Etc, 

We  can  furnish,  at  very  low  prices,  all  blank  books,  etc.,  used  by  students 
while  studying  Bookkeeping. 

For  information  regarding  the  books  named  above  or  any  other  commer- 
cial publications,  or  blank  books  for  ofiice  use,  etc.,  address 

D.",S!?m:!!.  DRAUGHON'S  PRACTICAL  BUSINESS  COLLEGE  CO., 
Nashville,  Tenn.,  U.  S.  A. 


DRAUGHON'.y  PRACTICAL 


BUJ"!  NE  J'J'  COLLEGE  J" 


For  FREE  Catalogue,  address  Jno.  F.  Draughon,  Pros.,  at  any  post  office  on  this  map. 

84 


INDEX. 


A 

ibreviations—  Pages. 

Greneral    75 

f Names  of  States 55 

count — 

Advertising  18 

Bank 19 

Bills  Payable   19 

Bills  Receivable    19 

^Building     18 

Cash 15,  26 

Cotton     20 

Expense 17 

Feed    18 

Fixtures  16 

^  Freight     17 

,j  Insurance    17 

Interest,  Discount,  and  Exchange...   17 

Live  Stock 19 

Manufacturing  16 

Merchandise    16 

Merchandise    (Ledger) 2,  12,  35 

Movable  Property  19 

Over  and  Short  19 

Profit  and  Loss  (or  Loss  and  Gain)  .   16 

Proprietor's  Private 15 

Real  Estate 18 

Salary    18 

Sales  18 

Stock   (Copartnership)    15 

Stocks  and  Bonds 16 

Taxes    17 

Traveling  Expense 17 

A  Consignment    20 

Advice — 

To  Beginners   15 

To  Teachers  and  Students •.   70 

A  Note  or  an  Acceptance 26 

A  Shipment    21 

Assets  15 

Bills  Payable  Register 54 

Bills  Receivable  Register 54 

Bookkeeping — 

Double  Entry  Made  Easy 81 

Four  Principal  Books 22,  27 

Fundamental  Principle  15 

Single  Entry   (explanation)    24 

Cash  Book — 

A  Diagram  and  Explanation  of. .  .22,  23 

How  to  Balance 29 

Jno.  F.  Draughon  Set 6 

McKinley  &  Bryan  Set 40 

Changing  Books  from  Single  Entry  to 

Double  Entry  56 

Check   (form  of  drawing)    38 

Classifying  Accounts  24 

Closing      Out      Accounts       (.Jno.      F. 

Draughon  Set)    33 

Commercial  Paper   11 

8: 


Pages. 
Condition  of  an  Account  (how  to  tell).  29 
Cost  and  Selling  Prices  of  Goods  (how 

to  mark)    25 

Dates 26 

Difference    between     Bills    Receivable 

and  Bills  Payable  19 

Double  Entry  Made  Easy 81 

Draft  (form  of  drawing)    41 

Draughon's    Progressive    Bookkeeping 

and  Legal  Adviser   76 

Entering  Notes  in  Registers 55 

"Explanatory   Column"    (comments)..   25 
Forms — 

Check    38 

Draft    41 

Notes,  Bills,  etc 67 

General  Information    15 

General  Questions 68 

How  to  Catch  the  Ideas 58 

How  to  Journalize  Time  Sales 21 

Instructions  by  Mail 43 

Itemizing 24 

Journal — 

Diagram  and  Explanation  of 22,  23 

Ledger — 

Diagram  and  Explanation  of 22 

Skeleton 12 

Liabilities 15 

List  of  Books  Published  by  D.  P.  B.  C. 

Co 83 

Memorandum  Book  (explanation  of )  . .   24 
Memorandum  Entries — 

For    Changing    Books    from    Single 

Entry  to  Double  Entry 56 

Jno.  F.  Draughon  Set 27 

McKinley  &  Bryan  Set 45 

Taylor  &  Sons  Set 59 

Our  Debtors  (persons  who  owe  us) ...   20 
Our  Creditors  (persons  whom  we  owe)   20 

Posting    28 

Red    Ink    25 

Resources    15 

Rules  for  Declaring  Profits 26 

Sales  Book — 

Diagram  and  Explanation  of.  .22,  23,  31 

Jno.  F.  Draughon  Set 9 

McKinley  &  Bryan  Set 44 

Search  for  Information 58 

Sight  Draft  (explanation  of)    55 

Statement,  McKinley  &  Bryan  Set 51 

Taylor  &  Sons  Set  59 

The  Course  Outlined 70 

Trial  Balance — 

Diagram  and  Explanation  of 22 

Form  of  5 

How  and  Why  Taken 4 

Rules  for  Detecting  Errors  in 10 


VC  45021 


^P"^^^^  54TWT 


UNIVERSITY  OF  CALIFORNIA  LIBRARY 


